Expected returns Over the past 50 years, Stock AAA has an average return of 6.4% during normal

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Expected returns Over the past 50 years, Stock AAA has an average return of 6.4% during normal economies. The return is half this during bad years.

Contrarily, the return is double this during good years. You think there is a 40% chance of a normal economy and an equal chance of a bad and good year next year. If Stock AAA’s stock price is $10 today, what do you think it will be next year?

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Applied Corporate Finance Making Value Enhancing Decisions In The Real World

ISBN: 9783030816308

2nd Edition

Authors: Mark K. Pyles

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Question Posted: Jun 10, 2024 02:21 AM

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Expected returns Over the past 50 years, Stock AAA has an average return of 6.4% during normal

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Applied Corporate Finance Making Value Enhancing Decisions In The Real World

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