Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Medical Supply Company has a beta of 1
Medical Supply Company has a beta of 1.55 and recently paid a common stock dividend of $3.47. If the return on Treasury securities is currently 7.5% and the return on the S&P 500 index is 12%, what is the required rate of return on the firm's common stock? Group of answer choices 7.5% 18.5% 14.48% 12.93% 26.1%
| As per CAPM |
| expected return = risk-free rate + beta * (expected return on the market - risk-free rate) |
| Expected return% = 7.5 + 1.55 * (12 - 7.5) |
| Expected return% = 14.48 |
