The market return is 12% and the risk-free rate is 4%. Smallish Inc. has a market beta

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The market return is 12% and the risk-free rate is 4%. Smallish Inc. has a market beta of 0.9, a SMB beta of 0.65, and a HML beta of .52. The risk premium on HML and SMB are both 2%. If the market model generates a slope co-efficient of 0.8.

What is the difference between the Three-Factor model and the CAPM expected returns on Smallish Inc. stock?

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Intermediate Financial Management

ISBN: 978-1111021573

10th Edition

Authors: Brigham, Daves

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Posted Date: Apr 01, 2023 01:59 AM

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The market return is 12% and the risk-free rate is 4%. Smallish Inc. has a market beta

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Intermediate Financial Management

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