The current appropriate risk-free rate is 6% and the return on the market is 13.5%.Further assume that you calculated the levered beta above as 1.29.  Using the CAPM, estimate DUC’s cost of equity.  Be sure to state any additional assumptions.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 3P: Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required...
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The current appropriate risk-free rate is 6% and the return on the market is 13.5%.Further assume that you calculated the levered beta above as 1.29.  Using the CAPM, estimate DUC’s cost of equity.  Be sure to state any additional assumptions.

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