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This exercise is a toy example to apply CAPM and is adapted from J. Weston, Financial Theory and Corporate Policy The following data have been

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This exercise is a toy example to apply CAPM and is adapted from J. Weston, Financial Theory and Corporate Policy The following data have been developed for the Milliken Company: The risk-free interest rate is 0.066 and is expected to remain at this point for the foreseeable future. Write the equation for CAPM (the security market line) and calculate the beta for this company; What is the expected rate of return for Milliken Company from historical data and what is the required rate of return from CAPM

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