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P9-9: Cost of common stock: CAPM J&M Corporation has a beta, b, of 1.2. The risk-Free Rate is 6%, and the market return is 11%.

P9-9: Cost of common stock: CAPM J&M Corporation has a beta,b,of 1.2. The risk-Free Rate is 6%, and the market return is 11%.

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 CAPM.

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