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Compute the cost of equity-capm

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Cost of Equity: CAPM

Booher Book Stores has a beta of 0.9. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 8%. The market risk premium is 4.5%, and the return on an average stock in the market last year was 14%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

Reference no: EM132487755

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