You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns:

a. What was XYZ's average historical return? XYZ's average historical return was _________ %. (Round to one decimal place.)

b. Compute the market's and XYZ's excess returns for each year. The market's excess return for 2011 was -_____ %. (Round to the nearest integer.)

The market's excess return for 2012 was _____%. (Round to the nearest integer.)

XYZ's excess return for 2011 was _______%. (Round to the nearest integer.)

XYZ's excess return for 2012 was _________%. (Round to the nearest integer.)

Estimate XYZ's beta.

XYZ's beta is ________ . (Round to two decimal places.)

c. Estimate XYZ's historical alpha.

XYZ's historical alpha was _________%. (Round to one decimal place.)