Compute the SML. Beta 1.5 Dividend 0 Dividend Growth Rate 0% Expected Return on Market 12%...
Compute the SML.
| Beta | 1.5 |
| Dividend | 0 |
| Dividend Growth Rate | 0% |
| Expected Return on Market | 12% |
| Treasury Bills Yield | 2.10% |
| Most Recent Stock Price | 50.00 |
Homework Answers
required return = risk-free rate + Beta x (market rate-risk-free rate)
= 2.10% + 1.5 x (12% - 2.10%)
= 2.10% + 14.85%
= 16.95%
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Compute the SML.
Beta
1.5
Dividend
0
Dividend Growth Rate
0%
Expected Return on Market
12%...
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