You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and

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You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and you estimate the market risk premium to be 6%. If you expect the stock to have a return of 11% over the next year, should you buy it? Why or why not?

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Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

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Question Posted: Jan 14, 2012 02:15 AM

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You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and

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Plan Compute what the expected return for a stock with a beta of 12 should be You should buy ...View the full answer

Fundamentals of Corporate Finance

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