Question
LowDown Constructions common stock has an estimated beta of 1.53. The stocks next dividend, of $1.94 per share, is expected to be paid one year
LowDown Constructions common stock has an estimated beta of 1.53. The stocks next dividend, of $1.94 per share, is expected to be paid one year from today.
From the CAPM, the stock has an expected return of 11% - when measured as an EAR. The broad stock-market has an expected return of 10.1% - when measured as an EAR.
Determine the corresponding risk-free rate as an EAR.
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Foundations Of Financial Markets And Institutions
Authors: Frank J Fabozzi, Franco G Modigliani, Frank J Jones
4th Edition
0136135315, 978-0136135319
