The following table shows betas for several companies. Calculate each stock’s ex
ID: 2756300 • Letter: T
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 7%. Use a 8% risk premium for the market portfolio. (Round your answers to 2 decimal places.)
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 7%. Use a 8% risk premium for the market portfolio. (Round your answers to 2 decimal places.)
Explanation / Answer
Answer:
Company Beta Cost of Capital (RF+beta(Market risk premium) Cisco 1.44 18.52% Apple 1.66 20.28% Hershey 0.61 11.88% Coca-Cola 0.81 13.48%Related Questions
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