The risk-free rate is 5% p.a. The expected return on market is 9%. If a particular...
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The risk-free rate is 5% p.a. The expected return on market is 9%. If a particular share has a beta of 0.80, what is its expected return based on the CAPM? B. If another share has an expected return of 14%, what is the beta? C. We have two securities Share Company 1 Company 2 Beta 1.20 0.80 Expected return 13% p.a. 10% p.a. What would the risk-free rate have to be, if shares are correctly priced? The risk-free rate is 5% p.a. The expected return on market is 9%. If a particular share has a beta of 0.80, what is its expected return based on the CAPM? B. If another share has an expected return of 14%, what is the beta? C. We have two securities Share Company 1 Company 2 Beta 1.20 0.80 Expected return 13% p.a. 10% p.a. What would the risk-free rate have to be, if shares are correctly priced?
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Answer rating: 100% (QA)
A To calculate the expected return based on the CAPM Capital Asset Pricing Model we use the followin... View the full answer
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Financial reporting, financial statement analysis and valuation a strategic perspective
ISBN: 978-0324789416
7th Edition
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
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