Cost of Equity: CAPM Booher Book Stores has a beta of 0.4. The yield on a...
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Cost of Equity: CAPM Booher Book Stores has a beta of 0.4. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 8%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 13%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places. 8.2 % Cost of Equity: CAPM Booher Book Stores has a beta of 0.4. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 8%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 13%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places. 8.2 %
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