Estimated cost of common equity


Problem:

Booher Book Stores has a beta of 1.3. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 6.5%. The market risk premium is 6%.

Requirement:

Question: What is the estimated cost of common equity using the CAPM?

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Accounting Basics: Estimated cost of common equity
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