Question
A share of Unicorn common stock is trading at $22.00 per share. It has a book value of $16.00 per share and generates earnings per
A share of Unicorn common stock is trading at $22.00 per share. It has a book value of $16.00 per share and generates earnings per share of $1.20. It has a beta of 1.2, the risk-free rate of return as determined by the 10-year US Treasury bond yield is 2% percent, and the market generates a rate of return of 10 percent. What is the expected rate of return on this asset?
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The expected rate of return on the Unicorn common stock is approximately 3887 This can ...Get Instant Access to Expert-Tailored Solutions
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
4th Edition
1439078084, 978-1439078082
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