Question: Problem 12-17 CAPM and Expected Return (LO2) The following table shows betas for several companies. Calculate each stock's expected rate of return using the CAPM.

Problem 12-17 CAPM and Expected Return (LO2) The following table shows

Problem 12-17 CAPM and Expected Return (LO2) 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 6% risk premium for the market portfolio (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Beta Cost of Capital % Company Caterpillar Apple Johnson & Johnson Consolidated Edison 1.68 1.32 0.51 0.23 % %

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