1. The Excel file Stock Data contains monthly data for several stocks and the S&P 500 Index (i.e., the market). Assume the risk free rate of return is 2.5%.
   1. Compute the cost of equity (required rate of return) for Cin using the classic CAPM.
   2. Compute the Weighted Average Cost of Capital (WACC) for Cin using the classic CAPM if the corporate tax rate is 20%, the cost of debt is 15% and the capital structure is: 75% equity and 25% debt.

Cin

-2.90%

4.79%

2.91%

4.25%

5.30%

-0.88%

3.54%

3.76%

2.94%

2.86%

-0.86%

0.41%

-2.85%

-3.05%

4.85%

1.26%

5.82%

-7.20%

-0.86%

5.10%

1.69%

-0.83%

0.86%

4.66%

4.45%

0.34%

0.00%

1.18%

6.25%

0.37%

5.95%

0.00%

6.43%

7.72%

-6.22%

0.34%

-2.69%

3.45%

-6.46%

0.00%

8.77%

0.34%

3.39%

-1.30%

-1.69%

2.58%

3.20%

3.47%

2.91%

4.25%

5.30%

0.41%

-2.85%

-3.05%

4.45%

0.34%

0.00%

-2.69%

-1.69%

3.45%

S&P 500

2.40%

5.20%

4.00%

-0.50%

9.00%

1.90%

-0.40%

-2.30%

2.10%

2.40%

-6.70%

1.30%

2.60%

-2.50%

9.80%

-0.70%

-0.30%

-9.00%

-4.90%

-0.40%

6.40%

2.70%

4.40%

7.20%

2.40%

0.30%

4.30%

-4.60%

4.70%

2.40%

-1.60%

1.30%

-4.00%

11.40%

-1.90%

1.30%

-2.00%

2.90%

0.50%

-1.50%

4.00%

-2.00%

1.20%

0.40%

3.40%

1.30%

0.70%

1.40%

4.00%

-0.50%

9.00%

1.30%

2.60%

-2.50%

2.40%

0.30%

4.30%

-2.00%

3.40%

2.90%