Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Use the following information to answer the question(s) below.
Expected
Liquidating
Dividend
Market
Stock
Capitalization
Beta
Taggart Transcontinental
$800
$920
1.10
Rearden Metal
$600
$720
1.20
Wyatt Oil
$1000
$1100
0.80
Nielson Motors
$400
$500
1.40
All amounts are in millions.
If the risk - free rate is 3% and the market risk premium is 5%, then the CAPM's predicted expected return for Nielson Motors is closest to:
A. 10.0%
O B. 9.0%
Oc. 9.5%
O D. 8.5%
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