- Intro Amazon Has A Beta Of 0 9 The Risk Free Rate Is 1 And The Expected Return On The S P500 Is 8 Part 1 What Is Ama 1 (53.71 KiB) Viewed 13 times
Intro Amazon has a beta of 0.9. The risk-free rate is 1% and the expected return on the S&P500 is 8%. Part 1 What is Ama
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Intro Amazon has a beta of 0.9. The risk-free rate is 1% and the expected return on the S&P500 is 8%. Part 1 What is Ama
Intro Amazon has a beta of 0.9. The risk-free rate is 1% and the expected return on the S&P500 is 8%. Part 1 What is Amazon's cost of equity? 7.30% BAttempt 1/10 for 9.7 pts. Correct ✔ The cost of equity is the required return on the company's stock. We can use the CAPM to find the cost of equity: Te = Tf+B(E(TM) - T) = 0.01 +0.9 (0.08 -0.01) = 0.073 3+ decimals Attempt 4/10 for 9.7 pts. Part 2 Now assume that the expected market risk premium is 8%. What is Amazon's cost of equity?