Posted: September 21st, 2016
Please use the following (hypothetical) information to calculate the “cost of equity” by using the CAPM model:
RE = RF + Beta(RM – RF)
Nike = 20% + 0.80(7.50% – 20%) =
Sony = 20% + 1.40(8.50% – 20%) =
McDonald’s = 20% + 0.30(9.50% – 20%) =
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