Question
Siscoman Inc . has a beta of 1.94 and an actual expected return of 17.25 percent. The risk-free rate of return is 3.19 percent and
-
Siscoman Inc. has a beta of 1.94 and an actual expected return of 17.25 percent. The risk-free rate of return is 3.19 percent and the market rate of return is 11.78 percent. Is the stock fairly priced?
CAPM = 21.89%, overpriced.
CAPM = 15.55%, underpriced.
CAPM = 17.25%, fairly priced.
CAPM = 19.85%, overpriced.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
8th Edition
0324065914, 9780324065916
