a) What is the arithmetic average return for the stock? What is the arithmetic average return for
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Question:
a) What is the arithmetic average return for the stock? What is the arithmetic average return for the risk-free asset?
b) What is the risk premium of this stock?
Year | Stock Price | Stock Dividend | Risk-free rate |
0 | $17 | - | - |
1 | $19 | $0.69 | 2.25% |
2 | $22 | $0.80 | 2.40% |
3 | $25 | $0.88 | 1.75% |
4 | $28 | $0.92 | 1.95% |
5 | $33 | $1.30 | 2.70% |
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date: