Question
Calculate Amazon's required rate of return using CAPM. Formula= Return=Rf + Stocks Beta( US Market premium- Rf) where Rf = risk free rate of return
Calculate Amazon's required rate of return using CAPM.
Formula= Return=Rf + Stocks Beta( US Market premium- Rf) where Rf = risk free rate of return (10 year treasury) Use .9% Beta= from Yahoo finance for your stock US Market premium= 5.6%
Return= .9% +1.20 (5.6%-.9%)
Return= 6.72%
Can someone verify if this is correct? I always remember to upvote. Thank you.
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
7th Edition
0357442040, 978-0357442043
