2. The stock of Healthy Eating, Inc., has a beta of .88. The risk-free rate is...

2. The stock of Healthy Eating, Inc., has a beta of .88. The risk-free rate is 3.8 percent and the market return is 9.6 percent. What is the expected return on Healthy Eating's stock?

Expert Solution

Expected return=risk free rate+beta*(market rate-risk free rate)

=3.8+(9.6-3.8)*0.88

which is equal to

=8.904%

jeff jeffy answered 2 years ago

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