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3 . APT Maneet Gupta, the CFO of Ultra Bread, has decided to use an APT model to estimate the required return on the company's
APT Maneet Gupta, the CFO of Ultra Bread, has decided to use an APT model to estimate the required return on the company's stock. The risk factors she plans to use are the risk premium on the stock market, the inflation rate, and the price of wheat.Because wheat is one of the biggest costs Ultra Bread faces, she feels this is a significant risk factor for Ultra Bread. How would you evaluate her choice of risk factors? Are there other risk factors you might suggest?
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