Using the Capital Asset Pricing Model *(CAPM) and the Betas from the table below, along with market parameters shown below, what is the required return for Ford Motor Co.? (round your answer to two decimal places)

Company Beta

US Steel 1.77

Ford Mo Co 1.31

General Electric 1.20

Boeing 0.94

Amazon 0.90

Starbucks 0.79

McDonalds 0.51

Walmart 0.26

Market Details

Current T-Bill Price 985.12

Historic Average T-Bill Return 2.3%

Current Market Return 8.5%

Historic Average Market Return 8.9%

B) Review the table below. Beta is a measure of sensitivity, showing how the returns of an individual investment compare to the returns of the Market as a whole. Beta is measured by analyzing actual historic Market returns. Starbucks sells coffee. What might explain why a company like Starbucks has its Beta at that level ?