Can you please give me correct answer the financial accounting question? A stock has a beta of 1.15, the expected return on themarket is 16 percent, and the risk-free rate is 7.2 percent.What must the expected return on this stock be?

Step 1: Define Capital Asset Pricing Model (CAPM)The CAPM equation is used to ascertain the rate of…

Answered: A stock has a beta of 1.15, the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 1P

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A stock has a beta of 1.15, the expected return on the market is 16 percent, and the risk-free rate is 7.2 percent. What must the expected return on this stock be?