The following table shows betas for several companies. Calculate each stocks expected rate of return using the
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 4%. Use a 7% risk premium for the market portfolio.
Company Beta
Caterpillar.............................................1.74
Apple.....................................................1.38
Johnson & Johnson..............................0.57
Consolidated Edison...........................0.29
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1260566093
10th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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