Assistance requested in calculating the answer to this practice
question.
According to the CAPM,
Required Return = Risk-free Rate + [Beta * Market Premium]
= 6% + [1.65 * 12%]
= 6% + 19.8%
= 25.8%
So, 4th option is correct.
Assistance requested in calculating the answer to this practice question. Using the Capital Asset Pricing Model...
Using the capital asset pricing model (CAPM), Sun State determined that the required rate of return for a capital budgeting project it is evaluating is equal to 18 percent. If U.S. Treasury bonds yield 7 percent and the market risk premium is 5 percent, what is the project's beta coefficient?
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please answer
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