1. You are calculating an equity required rate of return for Chipotle Mexican Grill Inc. (CMG) using the CAPM. Rather than relying on the published beta for CMG or calculating one yourself, you are going to base you required rate of return on the betas of three comparable companies: WEN, MCD, and YUM. The current 90-day T-bill rate is 0.03 percent and the current yield on a 30-year T-Bond is 2.25 percent. The current long-term, geometric mean equity risk premium over T-bills is 7.10 percent and over T-Bonds is 6.2 percent. Given the information below, calculate the required return on RR equity using the average unlevered beta for the comparable firms, re-levered to reflect CMGs capital structure. Show all your work!

Company	Published Beta	Debt/TA	Tax Rate
WEN	0.99	0.29	0.35
MCD	0.47	0.45	0.32
YUM	0.98	0.37	0.30

The debt-TA ratio of CMG is 0.01 and the corporate tax rate is 0.35.