Calculate the cost of equity capital using capm if the risk-free rate of interest is 5 per cent, the return on the market portfolio is 12 per cent, beta is 0.8 and the franking premium is 2 per cent.
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Cost of Equity = Risk-Free Rate + Beta * (Market Rate of Return - Risk- Free Rate). The rate of ... The risk-free rate based on the three-month T-bill is 4.5 percent.
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