Estimated cost of common equity using CAPM

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Booher Book Stores has a beta of 0.6. The yield on a 3-month T-bill is 3.5% and the yield on a 10-year T-bond is 6.5%. The market risk premium is 4%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

Reference no: EM131558795

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