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Calculate the equity premium using the following data: ⚫ Stock market return = 9.8% ⚫ Short-term Treasury bills return = 3.1% • Corporate bond return = 6.9% • Inflation = 2.6% What is the equity premium? a. 6.7% b. 5.2% c. 6.1% d. 4.3%

Calculate the equity premium using the following data: ⚫ Stock market return = 9.8% ⚫ Short-term Treasury bills return = 3.1% • Corporate bond return = 6.9% • Inflation = 2.6% What is the equity premium? a. 6.7% b. 5.2% c. 6.1% d. 4.3%

Entrepreneurial Finance
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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Calculate the equity premium using the following data: ⚫ Stock market return = 9.8% ⚫ Short-term Treasury bills return = 3.1% • Corporate bond return = 6.9% • Inflation = 2.6% What is the equity premium? a. 6.7% b. 5.2% c. 6.1% d. 4.3%
Transcribed Image Text:Calculate the equity premium using the following data: ⚫ Stock market return = 9.8% ⚫ Short-term Treasury bills return = 3.1% • Corporate bond return = 6.9% • Inflation = 2.6% What is the equity premium? a. 6.7% b. 5.2% c. 6.1% d. 4.3%
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