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8 B 1. 0 3 5. eBook 1 Problem Walk-Through Cost of Equity: CAPM Booher...

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8 B 1. 0 3 5. eBook 1 Problem Walk-Through Cost of Equity: CAPM Booher Book Stores has a beta of 1.2. The yield on a 3-month T-bill is 3% and the yield on a 10-year T-bond is 7%. The market risk o premium is 6.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places. 3. %

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