Calculate the cost of equity by using the capm model


Problem: Please use the following (hypothetical) information to calculate the "cost of equity" by using the CAPM model:

RE = RF + Beta(RM - RF)

Nike = 20% + 0.80(7.50% - 20%) =

Sony = 20% + 1.40(8.50% - 20%) =

McDonald's = 20% + 0.30(9.50% - 20%) =

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Finance Basics: Calculate the cost of equity by using the capm model
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