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You run a regression of X Company stock's returns against the market returns over a five-year time period (using monthly data) and come up with

You run a regression of X’ Company stock's returns against the market returns over a five-year time period (using monthly data) and come up with the following output: Intercept = .20%, Slope = 1.20 Your stock had an annualized standard deviation of returns of 40% whereas the market standard deviation was only 20%. The annualized risk-free rate, on average, over the last five years has been 6% and it is currently at 7%. The risk premium = 8.5%. The annualized dividend per share currently is $2.00 and the stock is currently selling for $50 (There are 100,000 shares outstanding) Evaluate the performance of X Company over the five-year time period of your analysis.

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