In early 2008, we estimated a beta of 1.162 for Deutsche Bank, which used in conjunction with the Euro risk-free rate of 4% (in January 2008) and an equity risk premium of 4.50%, yielded a cost of equity of 9.23%. In November 2013, the Euro risk-free rate had dropped to 1.75% and the Deutsche’s equity risk premium had risen to 6.12%. Required: What is the Cost of Equity for
In early 2008, we estimated a beta of 1.162 for Deutsche Bank, which used in conjunction with the Euro risk-free rate of 4% (in January 2008) and an equity risk premium of 4.50%, yielded a cost of equity of 9.23%. In November 2013, the Euro risk-free rate had dropped to 1.75% and the Deutsche’s equity risk premium had risen to 6.12%. Required: What is the Cost of Equity for
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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- In early 2008, we estimated a beta of 1.162 for Deutsche Bank, which used in conjunction with the Euro risk-free rate of 4% (in January 2008) and an equity risk premium of 4.50%, yielded a
cost of equity of 9.23%. In November 2013, the Euro risk-free rate had dropped to 1.75% and the Deutsche’s equity risk premium had risen to 6.12%.
Required:
- What is the Cost of Equity for 2008
What is the Cost of equity for 2013
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