Question
Assume you are 35 years old, and have salary of $65,000 per year. you are in search of a good investment that can cover future
Assume you are 35 years old, and have salary of $65,000 per year. you are in search of a good investment that can cover future goals which include a car, emergency fund, and child education. you want invest 30% of annual salary for the purpose of investment. For this, you making an investment of 30% in equity, 70% in Debt. The return on Debt is 15%. The risk-free return is 4%, the beta of the market is 1.25, and the market return is 11%. What will be the E(R) of the stock using CAPM? If you wants an investment return of $100,000 at the age of 65 what will be the yearly investment you needs to make? Calculate the WACC.
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