Question
You determine that the Required Return on the Market Portfolio is 10%. The risk-free rate of return is 4%. Iggy Incorporated trades with a Beta
You determine that the Required Return on the Market Portfolio is 10%. The risk-free rate of return is 4%. Iggy Incorporated trades with a Beta to the market of 1.5. Using the CAPM, what is the expected return of Iggy Inc.?
- 8.5%
- 13%
- 19.%
- 20.5%
- 27%
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Study Guide To Accompany Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Mark Simonson
1st Edition
0321388682, 9780321388681
