Firm A has a beta of 5 and estimated cost of equity of 7%. Firm B...

Firm A has a beta of 5 and estimated cost of equity of 7%. Firm B has a beta of 0.7 and estimated cost of equity of 6%. What is the assumed market return and risk-free rate?

Show work and formula by hand-only. Do not use Excel.

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

values are rounded to 2 decimals. Thank you.

jeff jeffy answered 1 year ago

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