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 5%. Use a risk premium of 7% for the market portfolio. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Company Beta Cost of Capital Caterpillar Cisco Harley- Davidson Hershey 1.21 1.43 0.38 0.52

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