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Estimate cost of existing common equity for s corporation

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S Corporation's common stock has a beta of .83. The interest rate on 10 year U.S. Treasury bonds is 3.4 percent, and the interest rate on 1 year U.S. Treasury bills is 1.18 percent. Assuming an average market risk premium of 5.0 percent, use the mean-variance capital asset pricing model to estimate the cost of existing common equity for S Corporation?

Reference no: EM131412798

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