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Greeley [361]
3 years ago
15

beta of 0.88 and an expected dividend growth rate of 4.00% per year. The T-bill rate is 4.00%, and the T-bond rate is 5.25%. The

annual return on the stock market during the past 4 years was 10.25%. Investors expect the average annual future return on the market to be 12.50%. Using the CAPM, what is the firm's required rate of return? Do not round your intermediate calculations.
Business
1 answer:
gregori [183]3 years ago
6 0

Answer:

RA=11.6%

Explanation:

RA=Rf+(Rm-Rf)Ba

RA=?

Rf=5.25%

Rm=12.5%

Ba=.88

RA=5.25%+(12.5%-5.25%).88

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