You have risen through the ranks of a coffee company, from the lowly green-apron barista to the coveted black apron, and all the way to CFO. A quick internet check shows that your company's beta is 0.66. The risk-free rate is 4.6% and you believe the market risk premium to be 4.6%. What is your best estimate of investors' expected return on your company's stock (its cost of equity capital)? The expected return is __ % ? (Round to two decimal places.)

You have risen through the ranks of a coffee company, from the lowly green-apron barista to the coveted black apron, and all the way to CFO. A quick internet check shows that your company's beta is 0.66. The risk-free rate is 4.6% and you believe the market risk premium to be 4.6%. What is your best estimate of investors' expected return on your company's stock (its cost of equity capital)? The expected return is __ % ? (Round to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 3P

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