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12 May, 12:03

The beta of elsenore, inc., stock is 1.6, whereas the risk-free rate of return is 8 percent. if the expected return on the market is 15 percent, then what should investors expect as a return on elsenore

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  1. 12 May, 12:23
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    As per the CAPM, the investors of elsenore should expect a return of = rf + beta * (rm-rf)

    The investors of elsenore should expect a return of = 8+1.6 * (15-8) = 19.2%
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