Gator enterprises is doing its annual review of its cost of, Finance Basics

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Gator enterprises is doing its annual review of its cost of

Question: Gator Enterprises is doing its annual review of its cost of capital. The firm relies on the CAPM to estimate its cost of equity. The firm estimates its equity beta is 1.1, and today's yield on long-term U.S. Treasury bonds is 5%. The firm's CFO estimates the equity risk premium (same as market risk premium) to be 4.4%. Estimate the firm's cost of equity capital. Answer in decimal form to four decimal places.

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Finance Basics: Gator enterprises is doing its annual review of its cost of

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