3
As per CAPM |
expected return = risk-free rate + beta * (Market risk premium) |
Expected return% = 3 + 1.2 * (5) |
Expected return% = 9 |
Please ask remaining parts seperately, questions are unrelated |
QUESTION 3 "Assume that Tesla common stock has a Beta of 1.2, the risk-free rate of...
QUESTION 4 "You expect Caterpillar will pay dividends of 2.25 in one year, 2.50 in two years, and 2.75 in three years. From that point onwards, dividends will grow at 7% per year. Investors' required rate of return is 12%. According to the Dividend Discount Model, what should be Caterpillar's stock price?"
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5. The stock of Ford has a beta of 1.5. and the stock of Tesla has a beta of 0.4. The expected rate of return on the market is 8 percent, and the risk free rate is 1 percent. By how much does the required return on Ford exceed the required return on Tesla? (CAPM)
1. The stock of Ford has a beta of 1.5, and the stock of Tesla has a beta of 0.4. The expected rate of return on the market is 8 percent, and the risk free rate is 1 percent. By how much does the required return on Ford exceed the required return on Tesla? (CAPM)
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