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Problem 12-17 CAPM and Expected Return (LO2) The following table shows betas for several companies. Calculate each stocks expected rate of return using the CAPM.

Problem 12-17 CAPM and Expected Return (LO2)

The following table shows betas for several companies. Calculate each stocks expected rate of return using the CAPM. Assume the risk-free rate of interest is 7%. Use a 9% risk premium for the market portfolio. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Company Beta Cost of Capital
Caterpillar 1.65 %
Apple 1.29 %
Johnson & Johnson 0.48 %
Consolidated Edison 0.20 %

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