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Find the expected returns of following stocks by using the CAPM equation: 1. Facebook (FB) 2. Wells Fargo & Company (WFC) 3. Essentra plc (FLRAF)
Find the expected returns of following stocks by using the CAPM equation:
1. Facebook (FB)
2. Wells Fargo & Company (WFC)
3. Essentra plc (FLRAF)
Provide explanation and references of following:
- Interpret the expected return you get from CAPM equation. How beta value affects the expected return of the stock.
- From where you are obtaining value of beta.
- Are you using 2 years or 5 years beta value? Explain your reasoning.
- What is the source of your risk-free rate and what is your reason to select it?
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