What is colonial bancshare required rate of return

Reference no: EM13272311

Colonial Bancshare has a beta of 0.88 and an expected dividend growth rate of 4.00% per year. The T-bill rate is 4.00%, and the T-bond rate is 6.25%. The annual return on the stock market during the past 4 years was 10.25%. Investors expect the average annual future return on the market to be 9.50%. Using the SML, what is Colonial Bancshare 's required rate of return?

Reference no: EM13272311

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