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Saved An analyst has provided you with the following information about the common shares of two companies Wakefield Ltd. and Countryside Ltd. Common Shares Dividend
Saved An analyst has provided you with the following information about the common shares of two companies Wakefield Ltd. and Countryside Ltd. Common Shares Dividend per share Beta Standard deviation per share Market risk premium Risk-free rate of return Wakefield Ltd. $0.50 11.25 11% 5% 2.5% Countryside Ltd. $0.65 0.8 16% 5% 2.5% Required: A) Calculate the expected return for each company using the capital asset pricing model (CAPM) (use 4 decimal places) For Wakefield (2 marks) For Countryside (2 marks) B) If investors have a required return of 8% indicate which company would they invest in and why. (2 marks) Essay Toolbar navigation This question will be sent to your instructor for grading.
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