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The risk-free rate is currently 5.10%. In addition, you have the following information: Company Expected Return Beta Apple Inc. 8.67% 0.43 Orange LLC 14.23% ?
The risk-free rate is currently 5.10%. In addition, you have the following information: Company Expected Return Beta Apple Inc. 8.67% 0.43 Orange LLC 14.23% ? Alpine Tanning ? 1.48 A) You know that Apple Inc. is correctly priced because an army of analysts and thousands of institutional investors hold it. What does this tell you about the market risk premium that investors are pricing in? The market risk premium is % B) What beta for Orange LLC would make investor expectations consistent with your findings in part A)? C) Given the market risk premium in A), what is the correct expected return for Alpine Tanning? %
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