Question: a.What is equity risk premium? b.The graph below shows the yahoo finance screenshot of Baidu.Inc. i.Go to yahoo finance and find out the one year

a.What is equity risk premium?

b.The graph below shows the yahoo finance screenshot of Baidu.Inc.

i.Go to yahoo finance and find out the one year return of Baidu.Inc

ii.Go to Yahoo finance and find out the one year return of S&P 500 return.

iii.Use historical method and CAPM method to calculate the required return of Baidu.inc.(Assuming risk free rate to be zero).

iv.Explain why using S&P 500 as the benchmark might not be a good idea.

a.What is equity risk premium? b.The graph below shows the yahoo

Previous Close 126.45 Market Cap 43.111B Open 124.66 Beta (5Y Monthly) 1.38 Bid 124.83 x 800 PE Ratio (TTM) 9.75 Ask 124.88 x 800 EPS (TTM) 12.83 Day's Range 123.52 - 126.09 Nov 04, 2020- Nov 09, 2020 Earnings Date Forward Dividend & Yield 52 Week Range 82.00 - 147.38 N/A (N/A) Previous Close 126.45 Market Cap 43.111B Open 124.66 Beta (5Y Monthly) 1.38 Bid 124.83 x 800 PE Ratio (TTM) 9.75 Ask 124.88 x 800 EPS (TTM) 12.83 Day's Range 123.52 - 126.09 Nov 04, 2020- Nov 09, 2020 Earnings Date Forward Dividend & Yield 52 Week Range 82.00 - 147.38 N/A (N/A)

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