Market risk premium under CAPM
Not what you're looking for?
Analysts give Proctor & Gamble, the consumer products firm, an equity beta of 0.65. The risk-free rate is 4.0 percent. An analyst calculates an equity cost of capital for the firm of 7.9 percent using the capital asset pricing model (CAPM). What market risk premium is she assuming?
Purchase this Solution
Solution Summary
The solution computes market risk premium under CAPM for buying Proctor and Gamble.
Solution Preview
CAPM Formula
Cost of Equity/Expected Return = Risk free rate + ...
Purchase this Solution
Free BrainMass Quizzes
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Motivation
This tests some key elements of major motivation theories.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.