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Find equity cost of capital for firm-capital asset pricing

Analysts give Procter & Gamble, the consumer products firm, an equity beta of 0.65.The risk-free rate is 4.0 percent. An analyst calculates an equity cost of capital for the firm of 7.9 percent using the capital asset pricing model (CAPM). 'What market risk premium is she assuming?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find equity cost of capital for firm-capital asset pricing

Reference No:- TGS0557846

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : What rate of exchange used to translate the dividend

Q : Income property cash flow

Q : Shortcoming of most ratios and rules of thumb

Q : Direct capitalization models

Q : Find equity cost of capital for firm-capital asset pricing

Q : Before-tax equity reversion

Q : Levered rate of return on the project

Q : Levered internal rate of return

Q : What is the first years amortization

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Find equity cost of capital for firm-capital asset pricing

Reference No:- TGS0557846

Recent Questions Asked Finance Basics

Q : What rate of exchange used to translate the dividend

Q : Income property cash flow

Q : Shortcoming of most ratios and rules of thumb

Q : Direct capitalization models

Q : Find equity cost of capital for firm-capital asset pricing

Q : Before-tax equity reversion

Q : Levered rate of return on the project

Q : Levered internal rate of return

Q : What is the first years amortization

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