NIKE ANALYSIS

3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required

return on THE COMPANY stock. Note that you will need the risk-free rate and the market return. Show this information in your project.

A) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate, beta, and the market return.

b) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.comclick onMarkets - U.S. Treasury Bonds Rates.

You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks.

Discuss how appropriate this rate is as a measure of risk.