Your estimate of the market risk premium is 8%. The risk−free rate of return is 3.1% and General Motors has a beta of 1.5. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Your estimate of the market risk premium is 8%. The risk−free rate of return is 3.1% and General Motors has a beta of 1.5. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Chapter12: The Cost Of Capital
Section: Chapter Questions
Problem 10QTD
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Your estimate of the market risk premium is 8%. The risk−free
![Your estimate of the market risk premium is 8%. The risk-free rate of return is 3.1% and General Motors has a beta of 1.5.
According to the Capital Asset Pricing Model (CAPM), what is its expected return?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6915fcc5-65a1-4b3d-96d0-34fcabae7a60%2F6244e87b-a687-44fe-bbfb-7fb29a3d7043%2Fiz4uq69_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Your estimate of the market risk premium is 8%. The risk-free rate of return is 3.1% and General Motors has a beta of 1.5.
According to the Capital Asset Pricing Model (CAPM), what is its expected return?
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