Sales Revenue 10,000 9,000 Costs Net Income 2,000 Dividends 500 NEXT YEAR QUESTIONS Sales revenue growth 0.16 Forecasted sales revenue 11600 Total Costs Growth 0.1 Forecasted total cost value 9900 Dividends per share (yr Shares outstanding 4 Forecasted net income 2320 900 Forecasted net income GR 1.16058029 Average PE ratio value Required Return 20 Forecasted EPS 2.57777778 14.25 USING PE M Forecasted target stock price 51.5555556 Forecasted total dividends value 580 Forecasted Dividends per share 0.64444444 Stock price quote of $97, what is the expected return in % BUY, SELL, OR HOLD?
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
How do I solve the expected return percent and know if i should buy or sell it?
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