Nestle cost of equity based on domestic portfolio

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Nestle of Switzerland Revisited.? Nestle of Switzerland is revisiting its cost of equity analysis in 2014. As a result of extraordinary actions by the Swiss Central? Bank, the Swiss bond index yield? (10-year maturity) has dropped to a record low of 0.50?%. The Swiss equity markets have been averaging 8.80?% returns, while the Financial Times global equity market? returns, indexed back to Swiss? francs, is at 9.35%.

?Nestle's corporate treasury staff has estimated the? company's domestic beta at 0.947?, but its global beta? (against the larger global equity market? portfolio) at 0.493.

a. What is? Nestle's cost of equity based on the domestic portfolio for a Swiss? investor?

b. What is? Nestle's cost of equity based on a global portfolio for a Swiss? investor?

Reference no: EM131905651

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