Employing the capital asset pricing model

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Reference no: EM131591381

Pan American? Airlines' shares are currently trading at $67.25 each. The yield on Pan? Am's debt is 6?% and the? firm's beta is 0.8 The? T-Bill rate is 3.5?% and the expected return on the market is 9.5%. The? company's target capital structure is 35% debt and 65?% equity. Pan American Airlines pays a combined federal and state tax rate of 35?%. What is the estimated cost of common? equity, employing the Capital Asset Pricing Model? (CAPM)?

The estimated cost of common equity for Pan American Airlines is __?%. (Round to two decimal? places.)

Reference no: EM131591381

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