Estimate the cost of equity for tyke what is its beta, Financial Management

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Estimate the cost of equity for tyke what is its beta

Tyke, Inc. is a chain retailer of children's tech toys. The CFO wants to estimate the cost of common equity. The beta for Tyke is .75. The 10-year Treasury bond rate is 2.32%. The CFO plans to use a market risk premium of 5%.

a. Estimate the cost of equity for Tyke.

b. If Tyke rearranges its financing, so that it is 100% equity financed, what is its beta coefficient?

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Financial Management: Estimate the cost of equity for tyke what is its beta

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Financial Management: Estimate the cost of equity for tyke what is its beta

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