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You can find estimates of stock betas by logging on to finance.yahoo.com and looking at a company’s Statistics. Try comparing the stock betas of Alphabet (GOOG), The Home Depot (HD), Procter & Gamble (PG), Altria Group (MO), and Caterpillar (CAT). Once you have read Section 12.3, use the capital asset pricing model to estimate the expected return for each of these stocks. You will need a figure for the current Treasury bill rate. You can find this on www.treasury.gov (look for the link to Data). Assume for your estimates a market risk premium of 7%.
book: BREALEY | MCGRAW-HILL FUNDAMENTALS OF CORPORATE FINANCE | 2023 | 11
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