Question: Correlation Hope Mexico World Std(%) Required return (%) Hope 1 0.7 0.5 20% ?? Mexico 1 0.8 16% 12% World 1 12% 10% Suppose that

Correlation Hope Mexico World Std(%) Required return (%) Hope 1 0.7 0.5 20% ?? Mexico 1 0.8 16% 12% World 1 12% 10% Suppose that the Mexican stock market is segmented from the rest of the world. Using the CAPM and a risk-free rate of 5%, estimate the equity cost of capital for Hope. O 10.035% 12.100% 11.125% 15.450%

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