The following table shows betas for several companies. Calculate each stocks expected rate of return using the
Fantastic news! We've Found the answer you've been seeking!
Question:
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 8%. Use a 10% risk premium for the market portfolio
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
Company | Beta | Cost of Capital |
Caterpillar | 1.83 | % |
Apple | 1.47 | % |
J&J | 0.66 | % |
Consolidated Edison | 0.38 | % |
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260566093
10th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date: