According to the MRK data summary provided: Please calculate the Alpha Value of Merck Stock

According to the MRK Data Summary provided: (1) Please calculate the Alpha Value of Merck Stock The current Risk Free Rate - 0.958% The current YTD market return= 8.63% The D1 forward dividend = $2.44 CAPM Equation: Ri Rf + Beta(Rm - Rf) Ri = Expected Return on this invested Asset RE - Risk-free Rate (from Government Bonds) Rm = Market Rate of Return Beta Beta of Security: Sensitivity of Expected Asset Return to the Expected Market Return = Today's MRK Stock Price One-Year Target Estimate Risk-Free Rate Market Return Rate Beta P/E of MRK P/E of S&P 500 /E & Forward Dividend D1 Company's Revenue Growth Rate $81.05 $95.58 0.958% 8.63% 0.43 17.90 = = Ri 39.81 $2.44 7.81% = HPR (Holding Period Return) (2) Please answer ...... Alpha Should you buy the MRK Stock today? Why? According to the MRK Data Summary provided: (1) Please calculate the Alpha Value of Merck Stock The current Risk Free Rate - 0.958% The current YTD market return= 8.63% The D1 forward dividend = $2.44 CAPM Equation: Ri Rf + Beta(Rm - Rf) Ri = Expected Return on this invested Asset RE - Risk-free Rate (from Government Bonds) Rm = Market Rate of Return Beta Beta of Security: Sensitivity of Expected Asset Return to the Expected Market Return = Today's MRK Stock Price One-Year Target Estimate Risk-Free Rate Market Return Rate Beta P/E of MRK P/E of S&P 500 /E & Forward Dividend D1 Company's Revenue Growth Rate $81.05 $95.58 0.958% 8.63% 0.43 17.90 = = Ri 39.81 $2.44 7.81% = HPR (Holding Period Return) (2) Please answer ...... Alpha Should you buy the MRK Stock today? Why