Question
A manager believes his firm will earn a 12.98 percent return next year. His firm has a beta of 1.38, the expected return on the
A manager believes his firm will earn a 12.98 percent return next year. His firm has a beta of 1.38, the expected return on the market is 11.10 percent, and the risk-free rate is 5.10 percent.
Compute the return the firm should earn given its level of risk.(Round your answer to 2 decimal places.)
Required return
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
