What is the company expected returns and beta

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CAPM: You are given the following information about a company. Its current value in the stock market is $255 Million. The stock’s volatility (i.e., the standard deviation of its return) is 40% per year, and the correlation between its returns and the return on the market is 0.6.

The one-year risk free rate is 3% and the market’s risk premium is 6%. The volatility of the market’s return is 15% per year.

a. What is the company’s beta?

b. What is the company’s expected returns?

 

c. What is the company expected to be worth a year from now?

Reference no: EM131087971

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