Calculate the Cost of Equity

Calculate the Cost of Equity Capital according to the Capital Asset Pricing Model (CAPM) formula for The Coca-Cola Company and PepsiCo. The information you will need for the CAPM: you can find the company’s beta at finance.google.com Use 8% as the expected return on the market portfolio.

Go to http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield and use the rate on the 30-year Treasury bond as the risk free rate of return. Then explain your understanding of the CAPM and what this tells us about your companies

Financial statements. (2011). Retrieved from http://www.pepsico.com/Download/PepsiCo_Annual_Report_2010_Full_Annual_Report.pdf

Financial statements. (2011). Retrieved from http://www.thecoca-colacompany.com/investors/financial_statements.html

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