Question
9-3 You are thinking of buying a stock priced at $90 per share. Assume that the risk-free rate is about 5.1% and the market risk
9-3
You are thinking of buying a stock priced at $90 per share. Assume that the risk-free rate is about 5.1% and the market risk premium is 5.2%. If you think the stock will rise to $119 per share by the end of the year, at which time it will pay a $2.88 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?
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Applied Quantitative Finance
Authors: Härdle
3rd Edition
3662544857, 978-3662544853
