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calculate the beta and the cost of equity capital. The following historical data for a proxy firm is similar to the firm evaluated in the final project assignment.

Year Market Rate of Return Firm Rate of Return
20X0 25% 15%
20X1 10% 6%
20X2 15% 9%
20X3 20% 12%

Using the above data calculate the beta of the firm.
If the risk-free rate is 4%, and the market rate of return is 14%, calculate the required rate of return (cost of equity) for the stock using CAPM.

Submitted: 81 days and 5 hours ago.
Category: Homework
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Level/Year: Sophomore
Subject: Finance

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Expert: muvee
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Answered: 9/3/2009

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Mathematics Statistics

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