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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 8%. Use a 10% risk premium for the market portfolio.

Company Beta Cost of Capital

Caterillar 1.77

Apple 1.41

Johnson & Johnson 0.60

Consolidated Edison 0.32

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