Question
7. CAPM AND REQUIRED RETURN Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.9% rate of inflation in the
7.
CAPM AND REQUIRED RETURN
Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.9% rate of inflation in the future. The real risk-free rate is 2%, and the market risk premium is 6%. Mudd has a beta of 1.7, and its realized rate of return has averaged 8.5% over the past 5 years. Round your answer to two decimal places.
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
7th Edition
1259919714, 978-1259919718
