$14$

PR $9-7($Static$)($LO $9\mathrm{.}5)$ Let's suppose that we are trying to determine the cost of equity capital for Amazon.

$6\mathrm{.}66$

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Let's suppose that we are trying to determine the cost of equity capital for Amazon. To estimate that amount, we'll use the $10-$year Treasury bond rate of $3$ percent as the risk$-$free rate $(R_f),$ the market risk premium $(E{R}_m-R_f)$ is $5\mathrm{.}5$ percent, and beta is $2\mathrm{.}09.$

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a$.$ What would be the expected cost of equity capital?

Note: Round your answer to $3$ decimal places.

References

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