Question
The following data have been developed for Ding Corp. State Probability Market Return Company Return 1 0.10 -0.12 -0.24 2 0.30 0.03 0.00 3 0.40
The following data have been developed for Ding Corp.
| State | Probability | Market Return | Company Return |
| 1 | 0.10 | -0.12 | -0.24 |
| 2 | 0.30 | 0.03 | 0.00 |
| 3 | 0.40 | 0.10 | 0.15 |
| 4 | 0.20 | 0.20 | 0.50 |
Assume that risk free rate is 3%. The covariance between Ding and the market portfolio is 0.018408.
Find the required rate of return for Ding Corp using Capital Asset Pricing Model (CAPM ).
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The Handbook Of Financial Communication And Investor Relations
Authors: Alexander V. Laskin
1st Edition
1119240786, 978-1119240785
