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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
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 9%. Use a 11% risk premium for the market portfolio.
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
| Company | beta | Cost of Capital |
|---|---|---|
| Caterpillar | 1.78 | |
| Apple | 1.42 | |
| Johnson & Johnson | .61 | |
| Consolidated Edison | .33 |
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