Question: Use CAPM to estimate the expected return for the shares of: i) your case company; and ii) a hypothetical company with a beta of 1.40.

Use CAPM to estimate the expected return for the shares of: i) your case company; and ii) a hypothetical company with a beta of 1.40. To do this, use the yield to maturity of a 10-year Australian Government bond on 29 March 2021 as a proxy for the risk-free rate(1.65%), assume the market risk premium is 5% and use your case company's current 5-year beta(0.15). All infomation has been provided. 1

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