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a) Textile Industry recently in Pakistan is effected badly due to unfavorable economic performance in year 2019-2020. Government T-bill rate average in this year
a) Textile Industry recently in Pakistan is effected badly due to unfavorable economic performance in year 2019-2020. Government T-bill rate average in this year is 8.3 %. Expected return of the market portfolio for this year is calculated as 19 %. Calculate the Expected stock return of each Textile company and draw financial suggestion for this Textile sector based on the answer. Stocks Beta Honda 1.4 Pak Suzuki 0.8 Toyota 1.7 FAW 1.5 KIA 1 Pearl 1.4 12 11 13 13 12 16 b) Price of share A Price of share B 10 21 17 16 15 11
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Anwers a To calculate the expected stock return of each Textile company we can use the Capital Asset Pricing Model CAPM formula Expected Return RiskFree Rate Beta Market Return RiskFree Rate Where Ris...Get Instant Access to Expert-Tailored Solutions
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