What would you guess was the rate of return

Reference no: EM131118198

The monthly of return on t-bills is 1%. The market went up this month by 1.5%. In addition, AmbChaser,Inc., which has an equity beta of 2, surprisingly just won a lawsuit that awards it $1 million immediately.

a. If the original value of AmbChaser equity were $100million, what would you guess was the rate of return of its stock this month?

b. What is your answer to (a) if the market had expected AmbChaser to win $2 million?

Reference no: EM131118198

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