You are evaluating the attractiveness of johnson

Reference no: EM13621592

You are evaluating the attractiveness of Johnson Manufacturing Corporation Common Stock. Using the Capital Asset Pricing Model, calculate the required return on the stock based on the following assumptions: Market Risk Premium = 3.50%; Risk-Free Rate of Interest = 3.00%; and Stock's Beta = 1.25. If the stock's expected return equals 5.375%, do you consider the stock an attractive value? Explain your answer. Lastly, calculate the expected alpha on the stock.

Reference no: EM13621592

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