CAPM and Required Return

CAPM and Required Return
CAPM and Required Return

Want help to write your Essay or Assignments? Click here

CAPM and Required Return

Calculate the required rate of return for XYZ Inc. using the following information:

  • The investors expect a 3.0 percent rate of inflation.
  • The real risk-free rate is 2.0 percent.
  • The market risk premium is 6.0 percent.
  • XYZ Inc. has a beta of 1.7.
  • Over the past 5 years, the realized rate of return has averaged 13.0 percent.

A principal advantage of CAPM is the objective nature of the estimated costs of equity that the model can yield. CAPM cannot be used in isolation because it necessarily simplifies the world of financial markets. But financial managers can use it to supplement other techniques and their own judgment in their attempts to develop realistic and useful cost of equity calculations.

Want help to write your Essay or Assignments? Click here

Author: admin

This is author biographical info, that can be used to tell more about you, your iterests, background and experience. You can change it on Admin > Users > Your Profile > Biographical Info page."

Unlike most other websites we deliver what we promise;

  • Our Support Staff are online 24/7
  • Our Writers are available 24/7
  • Most Urgent order is delivered with 6 Hrs
  • 100% Original Assignment Plagiarism report can be sent to you upon request.

GET 15 % DISCOUNT TODAY use the discount code PAPER15 at the order form.

Type of paperAcademic levelSubject area
Number of pagesPaper urgencyCost per page:
 Total: