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CAPM Coca-cola and Pepsi

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

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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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