Calculate the equity premium on the following set of data: Data Value Stock market return 12.5% Corporate bond return 6.8% Short-term T-bills Inflation 4.1% 2.5%

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter7: Types And Costs Of Financial Capital
Section7.4: What Is Investment Risk?
Problem 4CC
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Please provide the answer to this general accounting question using the right approach.

Calculate the equity premium on the following
set of data:
Data
Value
Stock market return
12.5%
Corporate bond return 6.8%
Short-term T-bills
Inflation
4.1%
2.5%
Transcribed Image Text:Calculate the equity premium on the following set of data: Data Value Stock market return 12.5% Corporate bond return 6.8% Short-term T-bills Inflation 4.1% 2.5%
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