What is ABC Inc’s beta if its expected return is 10.7%, the market risk premium is...

Question

Question

What is ABC Inc’s beta if its expected return is 10.7%, the market risk premium is 6.5%, and the riskless rate is 2%?

Answer 1

Answer #1

Expected rate=risk free rate+Beta*market risk premium

10.7=2+Beta*6.5

Beta=(10.7-2)/6.5

=1.34(Approx).

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Answer 2

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