rry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job with an investment banking firm as a financial analyst. One of his first assignment is to investigate the investor-expected rate of return for technology firms: Apple (APPL), Dell (DELL) and Hewlett Packard (HPQ). Jerry’s supervisor suggested that he make his estimates using CAPM where the risk-free rate is 4.5%. the expected return on the market is 10.5% 1. Calculate the risk premium of the market show all the working formula where applicable/ 2. Calculate the expected return using CAPM equation using a beta coefficient of 2.00 3. Solve the expected return for Apple using the beta from Yahoo and the beta from MSN and a risk-free rate of 4.5% and a market risk premium of 6% yield 4. Calculate the expected return with the CAPM equation using each of the following beta estimates for the three technology firms. Present the information
Jerry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job with an investment banking firm as a financial analyst. One of his first assignment is to investigate the investor-expected
1. Calculate the risk premium of the market show all the working formula where applicable/
2. Calculate the expected return using CAPM equation using a beta coefficient of 2.00
3. Solve the expected return for Apple using the beta from Yahoo and the beta from MSN and a risk-free rate of 4.5% and a market risk premium of 6% yield
4. Calculate the expected return with the CAPM equation using each of the following beta estimates for the three technology firms. Present the information in a tabulated format
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