Question
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 3%. Use a 5% risk premium for the market portfolio. (Round your answers to 2 decimal places.) |
| Company | Beta | Cost of Capital |
| Cisco | 1.24 | % |
| Apple | 1.46 | % |
| Hershey | 0.41 | % |
| Coca-Cola | 0.61 | % |
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Corporate Financial Management
Authors: Glen Arnold
4th Edition
0273719068, 978-0273719069
