Question

Naglaa has invested her money in Widget Inc.s common stock. She estimates that the stock has a betá of 1.24, and the expect
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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

А B С 1 2 3 3 Stocks beta Expected return on market Risk free rate 1.24 10.00% 4.50% 4 5 6 5 Stocks expected return 11.32%

Cell reference -

B19 А B с 1 N 3 Stocks beta Expected return on market Risk free rate 1.24 0.1 0.045 4 5 6 Stocks expected return =C4+C2*(C3

Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

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