The beta of M Simon Inc., stock is 1.7, whereas the risk-free rate of return is...
The beta of M Simon Inc., stock is 1.7, whereas the risk-free rate of return is 0.06. If the expected return on the market is 0.16, then what is the expected return on M Simon Inc? Round to four decimal places.
Homework Answers
Using CAPM Model,
Expected Return = Rf + Beta(Rm - Rf)
Expected Return = 0.06 + 1.70(0.16)
Expected Return = 0.3320
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