The following information relates to five stocks listed in five different sectors at the Nairobi Securities Exchange .The return on treasury bills is 8% and the average return in the market has been found to be 13%. Estimated Return(%) Beta Williamson tea 12 0.7 Equity Bank 8.2 1 Home Afrika 20 1.2 Bamburi Cement 1.4 Nation Media Group 10 -0.4 Jsing the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued or overvalued.

The following information relates to five stocks listed in five different sectors at the Nairobi Securities Exchange .The return on treasury bills is 8% and the average return in the market has been found to be 13%. Estimated Return(%) Beta Williamson tea 12 0.7 Equity Bank 8.2 1 Home Afrika 20 1.2 Bamburi Cement 1.4 Nation Media Group 10 -0.4 Jsing the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued or overvalued.

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

9th Edition

ISBN:9781305635937

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter17: Multinational Financial Management

Section: Chapter Questions

Problem 4DQ

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The following information relates to five stocks listed in five different sectors at the Nairobi SecuritiesExchange .The return on treasury bills is 8% and the average return in the market has been found to be13%. Using the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for eachstock and state whether it is undervalued or overvalued.
The following information relates to five stocks listed in five different sectors at A Securities Exchange .The return on treasury bills is 8% and the average return in the market has been found to be 13%. Estimated Return(%) Beta Williamson tea 12 0.7 Equity Bank 8.2 1 Home Afrika 20 1.2 Bamburi Cement 5 1.4 Nation Media Group 10 -0.4 Using the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued or overvalued
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