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Calculate the beta and the cost of equity capital. The following historical data for a proxy firm is similar to the

Calculate the beta and the cost of equity capital. The following historical data for a proxy firm is similar to the firm evaluated in the final project assignment.

                                         Year Market Rate of Return             Firm Rate of Return
20X0                                                     25%                                   15%
20X1                                                     10%                                   6%
20X2                                                     15%                                   9%
20X3                                                     20%                                  12%

Using the above data calculate the beta of the firm.
If the risk-free rate is 4%, and the market rate of return is 14%, calculate the required rate of return (cost of equity) for the stock using CAPM.