Problem $17\mathrm{.}1$

The stock market data is given in the following table.

The above table provides the correlations among Telmex, a telephone or communication company located in Mexico, the Mexico stock market index, and the world market index, together with the standard deviations $(\backslash ($ S D $\backslash ))$ of returns and the expected returns $(\backslash (\backslash$overline$\{\backslash$mathrm$\{$R$\}\}\backslash )).$ The risk$-$free rate is $\backslash (7\backslash \%\backslash ).$

Required:

Compute the domestic country beta of Telmex as well as its world beta.

Note: Do not round intermediate calculations. Round your answers to $\backslash (\backslash$mathbf$\{2\}\backslash )$ decimal places.

Problem $17\mathrm{.}2$

The stock market data is given in the following table.

The above table provides the correlations among Telmex, a telephone or communication company located in Mexico, the Mexico stock market index, and the world market index, together with the standard deviations $(\backslash ($ S D $\backslash ))$ of returns and the expected returns $(\backslash (\backslash$overline$\{\backslash$mathrm$\{$R$\}\}\backslash )).$ The risk$-$free rate is $\backslash (4\backslash \%\backslash ).$

Required:

Suppose the Mexican stock market is segmented from the rest of the world. Using the CAPM paradigm, estimate the equity cost of capital of Telmex.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $\backslash (\backslash$mathbf$\{2\}\backslash )$ decimal places.

Equity cost

Problem $17\mathrm{.}3$

The stock market data is given in the following table.

The above table provides the correlations among Telmex, a telephone or communication company located in Mexico, the Mexico stock market index, and the world market index, together with the standard deviations $(\backslash ($ S D $\backslash ))$ of returns and the expected returns $(\backslash (\backslash$overline$\{\backslash$mathrm$\{$R$\}\}\backslash )).$ The risk$-$free rate is $\backslash (7\backslash \%\backslash ).$

Required:

Suppose now that Telmex has made its shares tradable internationally via cross$-$listing on NYSE. Again using the CAPM paradigm, estimate Telmex's equity cost of capital.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $\backslash (\backslash$mathbf$\{2\}\backslash )$ decimal places.

Equity cost