Calculate the required return on micrsoft company stock

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Reference no: EM131933961

Question: Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on the Microsoft company stock. Note that you will need the risk-free rate and the market return. Show this information in your project.

To get the current yield on 10-year Treasury securities go to Finance!Yahoo's website -click on Market Data - Bonds. You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks. Show this information in your project.

To get the market return go to money-cnn's website, Click on Market, then click on S&P 500.You will use 52-weeks change for S&P500 listed as "Year-to-Date" percentage change. Show this information in your project.

Calculate the required return on Micrsoft Company stock using the Capital Asset Pricing Model (CAPM) Security Market Line. Please show your work.

Find on the Internet the 52-weeks change of the stock price. Compare the required return on the stock calculated using CAPM against it's historical return over the last 52 weeks, found on the Internet. Is there a difference between these returns? Is Microsoft company stock overvalued, undervalued, or properly valued? Why? Explain your answer.

Reference no: EM131933961

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