The following table shows betas for several companies. Calculate each stocks expected rate of return...
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Finance
The following table shows betas for several companies. Calculate each stocks expected rate of return using the CAPM. Assume the risk-free rate of interest is 7%. Use a risk premium of 9% 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, 1.19, _____?
Cisco, 1.41, _____?
Harley Davidson, 0.36, _____?
Hershey, 0.5, _____?
What is the cost of capital?
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