1) What would be the required return for J.M. Smucker stock using the 10-year U.S. Treasury Note for the risk-free rate, the beta for J.M. Smucker as found in the Value Line Survey, and the equity risk premium using the following Ibbotson Data:

Average Annual Return

Standard Deviation

Large-company stocks

11.9%

20%

Small-company stocks

17.5%

36.3%

Long-term corporate bonds

6.5%

7%

Long-term government

6.2%

12.5%

Intermediate-term government

5.5%

8.1%

U.S. Treasury bills

3.6%

3.2%

Inflation

3.0%

4.1%

Value Line:

Dividend Growth 10-Year (%)- 10.5

EPS Growth 10-Year (%)- 13.5