Question
Q1: A stock market comprises 3000 shares of stock A and 3000 shares of stock B. The share prices for stocks A and B are
Q1:
A stock market comprises 3000 shares of stock A and 3000 shares of stock B. The share prices for stocks A and B are $25 and $5,respectively. What is the capitalization of the market portfolio?
Q2:
Your estimate of the market risk premium is 8%.The risk-free rate of return is 3.3% and General Motors has a beta of 1.3. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Q3:
GM has a market value of $6 billion of equity and a market value of $14 billion of debt. What are the weights in equity and debt that are used for calculating the WACC?
Q4:
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