If the historical return over the past 30 years of the S&P 500 Index is 8% and the risk-free rate (as measured by the 10-Year Treasury Note) is 3%, what is the equity cost of capital for Summa Corp? If Summa's debt trades at Treasuries plus 1.25% what is Summa's WACC? What two factors are the biggest determinants of equity cost?

Answer rating: 100% (QA)

To calculate the equity cost of capital for Summa Corp we can use the Capital Asset Pricing Model CA... View the full answer