Beta (5Y Monthly) 1.62

52-Week Change -40.64%

S&P500 52-Week Change -3.61%

Using the information above (the stock's Beta, and the average 52-week return for the S&P 500) compute the required rate of return for your stock. In other words, plug these numbers into the CAPM model. Use 1.20% for the risk free rate.

Questions

Discuss the following questions in your initial post. You are required to make only one recommendation either to Martin or to Samantha.

• Compare the required rate of return that you just computed with the actual 52-week change for the security. What do you notice?
• In your opinion, is this stock a good investment for Martin or Samantha? Why or why not? Please explain your answer.