aluminum maker Alcoa has a beta of about 1.86, whereas Hormel Foods has a beta of

0.38. If the expected excess return of the market portfolio is 3%, which of these firms has a higher equity cost of capital, and how much higher is it?

1. Alcoa's equity cost of capital is ___%?
2. Hormel's equity cost of capital is ____%?
3. Therefore, ____?____ has the higher equity cost of capital by __?___ percentage points.