CAPM

Beale Manufacturing Company has a beta of 2.3, and Foley Industries has a beta of 0.5. The required return on an index fund that holds the entire stock market is 11.5%. The risk-free rate of interest is 5.5%. By how much does Beale's required return exceed Foley's required return? Do not round intermediate calculations. Round your answer to two decimal places.

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Calculate the required rate of return for Beale Manufacturing Company assuming that investors expect a 4.2% rate of inflation in the future. The real risk-free rate is 2.5%, and the market risk premium is 3.0%. Beale Manufacturing Company has a beta of 2.1, and its realized rate of return has averaged 8.0% over the past 5 years. Round your answer to two decimal places.

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