Newco stock using the capital asset pricing model

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Reference no: EM131896645

In finance, the capital asset pricing model (CAPM) is a model used to determine a theoretically appropriate rate of return of an asset. Please use the CAPM model to solve the following problem.

Newco's beta is 1.3 Assume the expected return on the marketis 9.9% and the risk-free rate is 3%. What is the expected return on Newco's stock using the capital asset pricing model (CAPM)?

Reference no: EM131896645

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