Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hastings Entertainment has a beta of 0.65. If the market return is expected to be 11 percent and the risk-free rate is 4 percent, what
Hastings Entertainment has a beta of 0.65. If the market return is expected to be 11 percent and the risk-free rate is 4 percent, what is Hastings' required return.
Here's how I worked the problem put but not coming up with other answers which is 8.55%
Expected return=(4%+0.65) x (11%-4%) =( .04+.65=.69) x (11%-4% = 7%) .69 x .07= .0483 What's wron with my calculation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started