Assume the risk-free rate of interest is 4 use a 7 risk, Financial Management

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Assume the risk-free rate of interest is 4 use a 7 risk

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 4%. Use a 7% risk premium 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 1.63 %

Cisco 1.24 %

Harley 0.82 %

Hershey 0.24 %

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Financial Management: Assume the risk-free rate of interest is 4 use a 7 risk

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Financial Management: Assume the risk-free rate of interest is 4 use a 7 risk

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