At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the risk-free rate was about 3.8%. Apple's price was $83.17. Apple's price at the end of 2007 was $197.84. If you estimate the market risk premium to have been 5.8%, did Apple's managers exceed their investors' required return as given by the CAPM?
At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the risk-free rate was about 3.8%. Apple's price was $83.17. Apple's price at the end of 2007 was $197.84. If you estimate the market risk premium to have been 5.8%, did Apple's managers exceed their investors' required return as given by the CAPM?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the risk-free rate was about 3.8%. Apple's price was $83.17. Apple's price at the end of 2007 was $197.84. If you estimate the market risk premium to have been 5.8%, did Apple's managers exceed their investors' required return as given by the
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