Question
Apple recently had a stock split, so I decided to buy a few shares of Apple stock. As of today, Apple's beta is 1.28, the
Apple recently had a stock split, so I decided to buy a few shares of Apple stock. As of today, Apple's beta is 1.28, the treasury yield is around 1.42%, and the market risk premium is 5.6% (Rudden, 2020). What is my expected return on Apple stock? Please explain your work.
| Economic State | Probability | Sony | McDonald's |
| Recession | 50% | 5% | 6.00% |
| Normal | 30% | 7.69% | 5.28% |
| Expansion | 20% | 15% | 5.80% |
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Financial Management Theory And Practice
Authors: Prasanna Chandra
7th Edition
0070656657, 978-0070656659
