Question
The 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 7%.
The 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 7%. Use a 10% risk premium for the market portfolio.
Company Beta Cost of Capital
Cisco 1.56% ?
Apple 1.78% ?
Hershey 0.73% ?
Coca-Cola 0.93% ?
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Advanced Financial Accounting
Authors: Richard Lewis, David Pendrill
7th Edition
0273658492, 978-0273658498
