Estimate an appropriate cost of capital benchmark for a short-term risky project based on the following data:

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YTM on T-bills = 2.6%

YTM on T-bonds = 4.1%

Historical arithmetic equity premium over T-bills = 8.5%

Historical arithmetic equity premium over T-bonds = 8.9%

Historical geometric equity premium over T-bills = 8.2%

Historical geometric equity premium over T-bonds = 6.6%

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Advanced Accounting

ISBN: 978-1118037911

1st Canadian Edition

Authors: Gail Fayerman

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Posted Date: Jul 12, 2023 02:30 AM

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Estimate an appropriate cost of capital benchmark for a short-term risky project based on the following data:

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Advanced Accounting

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