Answered: Epsilon Inc. has a stock with a beta of…

Epsilon Inc. has a stock with a beta of 1.4. The risk-free rate is 4.10%, and the expected return on the market is 13.60%. What is the required rate of return on Epsilon's stock?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 4P: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market...

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Question

Financial Accounting question

Epsilon Inc. has a stock with a beta of 1.4.
The risk-free rate is 4.10%, and the expected return
on the market is 13.60%.
What is the required rate of return on Epsilon's stock?

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