Assume that the consensus required return on common stocks is 14%. In addition, you read in the
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Assume that the consensus required return on common stocks is 14%. In addition, you read in the Bank of Canada Review that the expected rate of inflation is 5% and the estimated long-term real growth rate of the economy is 3%.What interest rate would you expect on T-bills? What is the approximate risk premium for common stocks implied by these data?
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Investment Analysis And Portfolio Management
ISBN: 9780176500696
1st Canadian Edition
Authors: Frank K. Reilly, Peggy L. Hedges, Philip Chang, Keith C. Brown, Hedges Reilly Brown
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