None You need to estimate the equity cost of capital for XYZ Corp. You have thefollowing data available regarding past returns:YearRisk-free Return20073%20081%Part C Estimate XYZ's historical alpha.3.1%4.6%5.5%4%Market ReturnXYZ Return6%10%-37%-45%wwwww

c. Expected Return of Market =(6%-37%)/2 =-15.50%Expected Return of XYZ =(10%-45%)/2…

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Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 1hM

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Chapter 12, Question 10b: You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: Year Risk-free Return 2007 3% 2008 1% Market Return XYZ Return 6% 10% -37% -45% Part B Estimate XYZ's beta (Hint: You'd better compute the market's and XYZ's excess returns for each year to proceed) beta = 1.17 beta 1.35 beta = 1.11 Obeta = 1.29
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You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: Year Risk-free Return 2007 3% 2008 1% Part C Estimate XYZ's historical alpha. 3.1% 4.6% 5.5% 4% Market Return XYZ Return 6% 10% -37% -45% wwwww