Cost of common stock equity—CAPM J&M Corporation common stock has a beta, b of 1.7. The risk-free rate is 3 % and the market return is 6%.
a. Determine the risk premium on J&M common stock.
b. Determine the required return that J&M common stock should provide.
c. Determine J&M's cost of common stock equity using the CAPM.
a. The risk premium on J&M common stock is % (Round to one decimal place)
b. The required return that J&M common stock should provide is % (Round to one decimal place)
c. J&M's cost of common stock equity using the CAPM is % (Round to one decimal place)