CAPM Required Return A company has a beta of .68. If the market return is expected...

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Question

CAPM Required Return A company has a beta of .68. If the market return is expected to be 13.8 percent and the risk-free rate

Answer 1

Answer #1

Required return = Risk free rate + beta(market return - risk free rate)

Required return = 5.9% + 0.68(13.8% - 5.9%)

Required return = 5.9% + 5.372%

Required return = 11.27%

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Answer 2

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