If a company has a beta of 1.3, the required rate of return on this company...

If a company has a beta of 1.3, the required rate of return on this company fs stock is 10.3 percent and the risk-free rate is currently 1.2 percent, what should be the excess market return at the moment. Use the idea of capital asset pricing model.

Solutions

Expert Solution

CAPM

re = 10.3% = 0.103

rf = 1.2% = 0.012

Beta = 1.3

jeff jeffy answered 2 years ago

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