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Find what is estimated cost of common equity using capm

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Reference no: EM132558336

Cost of Equity: CAPM:

Question 1: Booher Book Stores has a beta of 1.0. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 7%. The market risk premium is 5%, and the return on an average stock in the market last year was 12%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

Reference no: EM132558336

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