Mr Fadil Osman is Chief Financial Officer for Chanteq Corporation. He planned to invest RM2.6 billion...

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Mr Fadil Osman is Chief Financial Officer for Chanteq Corporation. He planned to invest RM2.6 billion from company surplus income. Assuming the following quotations are available: Common Stock SEPAH SYJ VIRUS Beta 0.8 1.00 1.60 Estimated Return 16% 19% 15% Given; Treasury bills: 5.5% and market return: 19% a) Calculate the required rate of return for each stock using CAPM b) Determine which stock is undervalue, overvalue of fairly valued using Security Market Line (SML) with graph. Mr Fadil Osman is Chief Financial Officer for Chanteq Corporation. He planned to invest RM2.6 billion from company surplus income. Assuming the following quotations are available: Common Stock SEPAH SYJ VIRUS Beta 0.8 1.00 1.60 Estimated Return 16% 19% 15% Given; Treasury bills: 5.5% and market return: 19% a) Calculate the required rate of return for each stock using CAPM b) Determine which stock is undervalue, overvalue of fairly valued using Security Market Line (SML) with graph.

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