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 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 |
| Cisco | 1.19 | % |
| Apple | 1.41 | % |
| Hershey | .36 | % |
| Coca-Cola | .50 | % |
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Essential Finance Guide
Authors: DK Publishing
1st Edition
078948157X, 978-0789481573
