You are thinking of buying a stock priced at $103 per share. Assume that the riskfree rate

Question:

You are thinking of buying a stock priced at $103 per share. Assume that the riskfree rate is about 4.4% and the market risk premium is 6.9%. If you think the stock will rise to $125 per share by the end of the year, at which time it will pay a $1.47 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

Question Posted: