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Georgia [21]
2 years ago
8

Mulherin's stock has a beta of 1.23, its required return is 11.75%, and its risk-free rate is 2.30%. What is the required rate o

f return on the market?
Business
1 answer:
vaieri [72.5K]2 years ago
3 0

Required return = Risk-free rate + Beta*(MArket rate- risk-free rate )

11.75=2.3+1.23*(Market rate-2.3)

(11.75-2.3)/1.23=Market rate-2.3

Market rate=(11.75-2.3)/1.23+2.3

Hence the required rate of return on the market would be 9.98%(Approx).

<h3>What is Return in the Share market? How do stocks produce returns?</h3>

A return is the increase in value of a project, investment, or item over time. This increase in value can be expressed as a price increase or a percentage increase. A gain is shown by a positive return, whilst a loss is indicated by a negative return.

As a simple illustration, a company with a 5% dividend yield in relation to its purchase price and a 5% value growth over the first year of ownership would have generated a 10% total return over the course of a year. Both a dollar amount and a percentage can be used to determine total returns.

To learn more about Market Share visit:

brainly.com/question/15298247

#SPJ4

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Jessica spends all her income on two goods, A and B.

The price of A is $5, and the price of B is $7.

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