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You are thinking of buying a stock priced at $ 105 per share. Assume that the risk-free rate is about 4.3 % and the market
You are thinking of buying a stock priced at $ 105 per share. Assume that the risk-free rate is about 4.3 % and the market risk premium is 6.5 %. If you think the stock will rise to $ 115 per share by the end of the year, at which time it will pay a $ 2.24 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?
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