Question: please show work. 3. Please use the Capital Asset Pricing Model to determine the rate of return for a stock under the following scenario: XYZ

please show work.

3. Please use the Capital Asset Pricing Model to determine the rate of return for a stock under the following scenario: XYZ Corporation has a beta (B) of 1.8 and the overall rate of return for the market is 10%. If the risk free rate of return (i.e. treasury bills) is 3%, what should the rate of return be for the stock of this company

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Your boss gives you your first assignment. It involves analyzing two Canadian Telecom companies Telus and Rogers. Telus stock is currently trading at sixty-five dollars per share. Economic forecasts...

Your friend Lorenzo Smith from Yorkville University just got a job as an investment analyst for a major Canadian financial institution. Lorenzo had a 93% average; however, everyone knows that he...

Your friend Pat Smith from Yorkville University just got a job as an investment analyst for a major Canadian financial institution. Pat had a 93% average, however, everyone knows that he cheated and...

Your friend Rico Smith from Yorkville University just got a job as an investment analyst for a major Canadian financial institution. Rico had a 93% average; however, everyone knows that he cheated...

***MUST SHOW ALL WORK AND ANY FORMULA'S USED*** 1. Risk and return are key determinants in share price. Increased risk, other things remaining constant, results in: a. a lower share price b. a higher...

You will receive a lot of likes if you show the work in excel, a lot of students of this class are looking for these answers. Thank you Table 1: Market Data Rf 1.18% 10% RM BBB Yields: 9-months...

Start with a new Excel file and answer each question on a separate sheet within your file (2 sheets for question #2). You will have 6 sheets in your file. Please make sure you use cell references...

See attached, let me know if you can help. Due date its next Monday, but I want to make sure I don't wait to the very last minute. Article Review format (two or three pages maximum) Abstract: One...

What is the range of investment horizons (in years) that the authors identified? What are the implications of such a wide range on the decision making process? 2. Is there a general consensus on what...

a a1. What is the range of investment horizons (in years) that the authors identified? What are the implications of such a wide range on the decision making process? 2. Is there a general consensus...

Anika Book Distributors, Inc., reported net income of $415,000 for 2009. The company also reported depreciation expense of $75,000 and a gain of $6,250 on the sale of machinery. The comparative...

Find the P value that the bar section in the figure can bear safely and calculate the stress in the section subjected to bending. Draw the distribution? (There is only moment in the x direction in...

The growth in principal is the same under both compound and simple interest if only one compounding period is involved. Group of answer choices True False

The manager of a company that installs carpeting has tracked the installation crew's output over the past several weeks, obtaining the figures listed below. What is the average labor productivity of...

6. Are my sources reliable?

How do you feel about the fact that even unintentionally using someone elses words, ideas, or intellectual property is still plagiarism? Does it seem unfair that you might suffer severe consequences...

5. Are my sources compelling?