The stock in Bowie Enterprises has a beta of 1.21 The expected retum on the market is 11 50 percent and the risk is 2.94 percent What is therequired return on the company's stock?OOMultusle Choice15.08%13.30%12.93%16.86%12.56%

Risk-free rate = 2.94%Beta = 1.21Expected market return = 11.50%

The stock in Bowie Enterprises has a beta of 1.21. The expected retum on the market is ft 50 percent and required return on the company's stock? Multiple Choice O 15.08% 13.30% 12.93% 16.96% rate is 2.94 percent. What is the

The stock in Bowie Enterprises has a beta of 1.21. The expected retum on the market is ft 50 percent and required return on the company's stock? Multiple Choice O 15.08% 13.30% 12.93% 16.96% rate is 2.94 percent. What is the

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

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.

Question

The stock in Bowie Enterprises has a beta of 1.21 The expected retum on the market is 11 50 percent and the risk is 2.94 percent What is the
required return on the company's stock?
O
O
Multusle Choice
15.08%
13.30%
12.93%
16.86%
12.56%

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Subject:- finance

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