Question
CAPM AND REQUIRED RETURN Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 5% rate of inflation in the future.
CAPM AND REQUIRED RETURN
Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 5% rate of inflation in the future. The real risk-free rate is 1%, and the market risk premium is 5%. Mudd has a beta of 1.7, and its realized rate of return has averaged 8% over the past 5 years. Round your answer to two decimal places.
%
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
2nd Edition
0471111864, 978-0471111863
