Dunkin corporations operate as a marketer and retailer of specialty coffee worldwide. The Company operates in 4 segments: South America, Europe, the Middle East, and Africa. China/ Asia Pacific and Development its stores offer coffee and tea beverages package roasted whole bean and ground coffees, and ready to drink coffee and tea products, juices and bottled water. The CFO is considering expanding into other markets and will be financing these projects with common equity. He therefore would like to calculate the cost of using common equity as a source of financing. Assume Starbucks has a beta of 1.2 and a risk premium of 8.5% also assumes the current risk-free rate is 5%. Show your work

Using the CAPM model calculate the required rate of Return for Starbucks