The stock using the capital asset pricing model

Assignment Help Financial Management

Reference no: EM132018752

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

1. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate and the market return.

a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com -click on Markets - U.S. Treasury Bonds Rates. 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.

b) Between 1926 and 2014, the compound annual rate of return of S&P 500 is estimated a 10.5%. We will use this number as the market return.

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

Reference no: EM132018752

Questions Cloud

Identify each of the problematic decisions made : Describe the scenario you selected and identify each of the problematic decisions made by the practitioner involved.

Calculate payback and accounting rate of return : Calculate payback, accounting rate of return, net present value, and internal rate of return for both server investments

How these stereotypes perpetuate violence against women : Explanation of gender and sexist stereotypes and assumptions around sexual assault made by a professional you observe in the case study episode.

What is mitchell debt ratio as of december : Mitchell Florists had the following total assets, liabilities, and equity as of December 31. What is Mitchell's debt ratio as of December 31

The stock using the capital asset pricing model : Calculate the required return on the stock using the Capital Asset Pricing Model (CAPM) Security Market Line.

No life insurance and is considering buying some : Matthew has no life insurance and is considering buying some. How much should he buy?

Compare the three major sociological perspectives : SOCI 1001S:Create a rough draft of an introduction and conclusion you might use in your Final Essay. State your thesis statement clearly in each and support.

Explanation of the potential value of juan and elenas : If a child is exposed to behavior standards that do not account for his or her developmental stage, how might this impact the child's development?

What is the asset beta for lauryn : Based on this information, what is the asset beta for Lauryn’s?

User Account

All Pages