A stock has a beta of 165 and the projected return on the


Problem 1: Using the capital asset pricing model (CAPM): A stock has a beta of 1.65, and the projected return on the market is 12.25 percent, with a risk-free rate of 4.75 percent. Calculate the projected return on this stock.

Problem 2: Calculating cost of equity: The Denton Corporation's common stock has a beta of 1.45 and a risk-free rate of 5.75 percent. What is Denton's cost of equity if the projected return on the market is 13 percent?

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Accounting Basics: A stock has a beta of 165 and the projected return on the
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