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J&M Corporation common stock has a beta, b, of 1.5 1.5. The risk-free rate is 4 % 4%, and the market return is 12 12%.

J&M Corporation common stock has a beta, b, of 1.5 1.5. The risk-free rate is 4 % 4%, and the market return is 12 12%.

a.Determine the risk premium on J&M common stock.

b.Determine the required return that J&M common stock should provide.

c.Determine J&M's cost of common stock equity using the CAPM.

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