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What is the expected return of TSLA Stock

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Question - You are considering investing in a new stock, Tesla (TSLA), and have decided to do some analysis before pulling the trigger. The beta of TSLA is 1.2, the market risk premium is 5%, and the risk free rate is 1%. You assume that the price per share of TSLA stock in one year will be $100, and that TSLA will retain all earnings and pay no dividends in the next year.

What is the expected return of TSLA Stock. What is the most you are willing to pay for TSLA stock?

Reference no: EM133007065

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