Question
The stock has an Alpha of 2% and a Beta of 1.2. The market return is 8% and the risk free rate is 1%. The
The stock has an Alpha of 2% and a Beta of 1.2. The market return is 8% and the risk free rate is 1%. The Expected return is 11%.
what is the firm specific return (residual) next year?
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Step: 1
To calculate the firmspecific return residual next year we need to subt...
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Fundamentals of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
1st canadian edition
978-0133400694
