AT&T Inc $20.60 Previous Close 20.66 Market Cap 147.475B Open 20.63 Beta (5Y Monthly) 0.69 Bid 20.58 x 21500 PE Ratio (TTM) 8.62 Ask 20.62 x 3200 EPS (TTM) 2.39 Day's Range 20.45 - 20.86 Earnings Date Jul 21, 2022 52 Week Rage 20.45 - 20.86 Forward Dividend & Yield 1.11 (5.34%) Volume 25,160,355 Ex-Dividend Rate Jul 08, 2022 Avg Volume 45,522,241 1y Target Est 23.31   1) Assuming the risk free rate is 3% and the market risk premium is 6%, what does the CAPm say the cost of equity is for AT&T?   Choose the closest.

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
Problem 1PS
icon
Related questions
Question

AT&T Inc $20.60

Previous Close 20.66 Market Cap 147.475B
Open 20.63 Beta (5Y Monthly) 0.69
Bid 20.58 x 21500 PE Ratio (TTM) 8.62
Ask 20.62 x 3200 EPS (TTM) 2.39
Day's Range 20.45 - 20.86 Earnings Date Jul 21, 2022
52 Week Rage 20.45 - 20.86 Forward Dividend & Yield 1.11 (5.34%)
Volume 25,160,355 Ex-Dividend Rate Jul 08, 2022
Avg Volume 45,522,241 1y Target Est 23.31

 

1) Assuming the risk free rate is 3% and the market risk premium is 6%, what does the CAPm say the cost of equity is for AT&T?   Choose the closest.

a) 7.1%

b) 9.0%

c) 9.9%

d) 17.3%

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education