Assume that the beta for IBM is 1.15. Also assume that RF is 5 percent and that

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Assume that the beta for IBM is 1.15. Also assume that RF is 5 percent and that the expected return on the market is 12 percent. The required return for IBM can be calculated as

K_IBM= 0.05 + 1.15(0.12 - 0.05)

= 13.05%

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Investments Analysis And Management

ISBN: 9781118975589

13th Edition

Authors: Charles P. Jones, Gerald R. Jensen

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Question Posted: Dec 31, 2023 10:34 AM

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Assume that the beta for IBM is 1.15. Also assume that RF is 5 percent and that

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the required return using CAPM is KIBM Rf BIBM RM Rf where KIBM is the required re...View the full answer

Investments Analysis And Management

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