Question
Writing a report on Walmart Inc. and need help with the following portion: Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate
Writing a report on Walmart Inc. and need help with the following portion:
Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Note that you will needthe risk-free rate and the market return.
Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will needthe risk-free rate and the market return.
a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com-click onMarkets - U.S. Treasury Bonds Rates.You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks.
b) Between 1926 and 2014, the compound annual rate of return of S&P 500 is estimated a 10.5%. We will use this number as the market return.
c)Calculate the required return on the stock using the Capital Asset Pricing Model (CAPM) Security Market Line.
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