Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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. The risk free rate is 7.6%.
(i) Potpuri Inc Stock has a beta of 1.7 and an expected return of 16.7% under
CAPM. What is the expected market risk premium of Potpuri Inc.
(ii) Magnolia Ind stock has the beta of 0.8 what is the expected return on the Magnolia
Ind?
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- JaiLai Cos. stock has a beta of 0.8, the current risk-free rate is 6.6 percent, and the expected return in the market is 10 percent. What is JaiLai's cost of equity/arrow_forwardStock A's stock has a beta of 1.30, and its required return is 13.75%. Stock B's beta is 0.80. If the risk-free rate is 2.75%, what is the required rate of return on B's stock? Do not round your intermediate calculations.arrow_forwardStock R has a beta of 1.8, Stock S has a beta of 0.55, the expected rate of return on an average stock is 9%, and the risk-free rate is 3%. By how much does the required return on the riskier stock exceed that on the less risky stock?arrow_forward
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