Suppose that the Treasury bill rate is 9% rather than 6%, as we assumed in Table 12.1,
Fantastic news! We've Found the answer you've been seeking!
Question:
Suppose that the Treasury bill rate is 9% rather than 6%, as we assumed in Table 12.1, and the expected return on the market is 11%. Use the betas in that table to answer the following questions.
a. Recalculate the expected return on the stocks in Table 12.1. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
b. Suppose now that you continued to assume that the expected return on the market remained at 11%. Now, what would be the expected returns on each stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
Related Book For
Principles of Corporate Finance
ISBN: 978-0078034763
11th edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen
Posted Date: