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Estimate the cost of equity using the capital asset pricing

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Reference no: EM132950906

The yield on 5-year Australian Government bonds as at 3 April 2019 is 3.46%. Mochaccinos Ltd's share price at 7 December 2020 is $100.32 per share while it has a beta coefficient of 1.77. Trailing twelve months (TTM) return on the ASX S&P 200 is 15.74%.

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Problem 1: Estimate the cost of equity using the Capital Asset Pricing Model (show all workings). What does the cost of equity tell you?

Reference no: EM132950906

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