21. Aluminum maker Alcoa has a beta of about 1.9, whereas Hormel Foods has a beta of 0.37. If the expected excess return of the market portfolio is 3%, which of these firms has a higher equity cost of capital, and how much higher is it? **round to two decimal places**
21. Aluminum maker Alcoa has a beta of about 1.9, whereas Hormel Foods has a beta of 0.37. If the expected excess return of the market portfolio is 3%, which of these firms has a higher equity cost of capital, and how much higher is it? **round to two decimal places**
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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21. Aluminum maker Alcoa has a beta of about 1.9, whereas Hormel Foods has a beta of 0.37. If the expected excess return of the market portfolio is 3%, which of these firms has a higher equity cost of capital, and how much higher is it?
**round to two decimal places**
Transcribed Image Text:Aluminum maker Alcoa has a beta of about 1.9, whereas Hormel Foods has a beta of 0.37. If the expected excess return of the market portfolio is 3%, which of
ammer Lol
these firms has a higher equity cost of capital, and how much higher is it?
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Uber Eat
Alcoa's equity cost of capital is %. (Round to two decimal places.)
04/24/20
Hormel's equity cost of capital is%. (Round to two decimal places.)
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Therefore,
has the higher equity cost of capital by percentage points. (Select from the drop-down menus and round to two decimal places.)
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