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can you slove this question? In the following, different parts of the question are independent and not related to each other. (a) Consider the stock
can you slove this question?
In the following, different parts of the question are independent and not related to each other. (a) Consider the stock of ABC Corporation, whose CAPM beta is 0.95. The expected annual return on the market is 15.25%, and the annual risk-free rate is 1.5%. Find the annual cost-of-capital for the stock. (b) Suppose that the beta of a stock is 1.6. The annual volatility of the market is 21.21%, and the annual volatility of the stock is 35.18%. What is the covariance between the return on the stock and the market? (c) Suppose that the cost-of-capital for Stock A and Stock B are 25.25% and 12.25% respectively. The CAPM betas of Stock A is 1.50. The risk-free rate is 2%. Find the expected return on the market and beta of Stock BStep by Step Solution
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