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The following table shows betas for several companies. Calculate each stock's 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 stock's expected rate of return using the CAPM. Assume the risk-free rate of interest is 5%. Use a 7% risk premium for the market portfolio. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Cost of Capital 15.04 X % 12.88 X % 8.02 X % 6.34 X % Company Caterpillar Apple Johnson & Johnson Consolidated Edison Beta 1.80 1.44 0.63 0.35
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