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What is the best estimate of the market risk premium

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Reference no: EM132281225

If you had access to the following information, what is the best estimate of the market risk premium for use in determining Ke?

  • 5-year Treasury note = 2.9%
  • current stock price = $74.82
  • average annual return on S&P 500 over past five years = 10.3%
  • 6-month Treasury bill rate = 1.8%
  • company's unlevered beta = 1.09
  • tax rate = 27.0%

Enter your answer as a number rounded to the nearest 1st decimal. Do not enter dollar signs, percentage signs, or commas. There is no error range for this question.

For example, if you calculate 9.4382, enter 9.4.

Reference no: EM132281225

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