$15$

PR $9-8($Algo$)($LO $9\mathrm{.}5)$ Let's suppose that we are trying to determine the cost of equity capital for Amazon using the capital asset pricing model $($CAPM$).$

$6\mathrm{.}76$

points

Skipped

Let's suppose that we are trying to determine the cost of equity capital for Amazon using the capital asset pricing model $($CAPM$).$ 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 $5\mathrm{.}9$ percent, and beta is $1\mathrm{.}47.$

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Answer the following question based on the details provided.

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