Booher Book Stores has a beta of 0.8. The yield on a 3-month T-bill is 4% and the yield on a 10-year T-bond is 6%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM?© BrainMass Inc. brainmass.com June 4, 2020, 12:29 am ad1c9bdddf
This post shows how to calcualte the estimated cost of common equity using CAPM.