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Here are data on two companies. The T-bill rate is 4.4% and the market risk premium is 5.3%. Company $1 Discount Store Everything $5 Forecast
| Here are data on two companies. The T-bill rate is 4.4% and the market risk premium is 5.3%. |
| Company | $1 Discount Store | Everything $5 |
| Forecast return | 12% | 11% |
| Standard deviation of returns | 10% | 12% |
| Beta | 1.5 | 1 |
| What would be the fair return for each company, according to the capital asset pricing model (CAPM)?(Round your answers to 2 decimal places.) |
| Company | Expected Return | ||
| $1 Discount Store | % | ||
| Everything $5 | % | ||
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Port Infrastructure Finance
Authors: Hilde Meersman, Eddy Van De Voorde, Thierry Vanelslander
1st Edition
