The following table shows betas for several companies. Calculate each stock's expected rate of return using the

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The following 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 5%. Use a 7% risk premium for the market portfolio.

CompanyBeta

Cisco .................................1.22

Apple ................................1.44

Hershey ............................. .39

Coca-Cola .......................... .53

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Jun 30, 2016 09:23 AM

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The following table shows betas for several companies. Calculate each stock's expected rate of return using the

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We can use the CAPM to derive the cos...View the full answer

Fundamentals of Corporate Finance

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