Using Yahoo! Finance find the value of beta for DR pepper/snapple .
Problem 1: What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?
Problem 2: Given the beta of your company, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium (that is - the difference between the expected rate of return on the 'market portfolio' and the risk-free rate of interest) is 6.5%, use the CAPM equation in order to find out what is the present 'cost of equity' of your company? Explain what is the meaning of the 'cost of equity'.