At a certain point in time, the risk free rate of return was 4.5%. Overall,...
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At a certain point in time, the risk free rate of return was 4.5%. Overall, the equity risk premium as observed to be 4.8%. Hence, the expected total return to equity holders over time was 9.3%. A software company was publicly traded and had a calculated Beta of 1.5. Given these inputs, what is the Cost of Equity (or the required return for equity securities) ?
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