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question 4 Suppose CAPM holds, and the beta of the equity of your company is 2.42. The expected market risk premium (the difference between the

question 4

Suppose CAPM holds, and the beta of the equity of your company is 2.42. The expected market risk premium (the difference between the expected market return and the risk-free rate) is 6.75% and the risk-free rate is 3.50%. Suppose the debt-to-equity ratio of your company is 30% and the market believes that probability of default on your debt is zero. What is the percentage return on assets of your business? (No more than two decimals in the percentage but do not enter the % sign.)

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