Subject: financial accounting Assume the market risk premium is 6%, the risk-freerate is 4%, and Nike has a beta of 1.4. Using the CapitalAsset Pricing Model (CAPM), what is Nike's expectedreturn?A) 10.4%B) 12.4%C) 11.2%D) 12.8%

Using the Capital Asset Pricing Model (CAPM), we can calculate Nike's expected return as follows:…

Answered: Assume the market risk premium is 6%,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume the market risk premium is 6%, the risk-free rate is 4%, and Nike has a beta of 1.4. Using the Capital Asset Pricing Model (CAPM), what is Nike's expected return? A) 10.4% B) 12.4% C) 11.2% D) 12.8%