Explore BrainMass

Explore BrainMass

    Required Rate of Return on Stock

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The real risk-free rate is 2.00%, investors expect a 3.00% future inflation rate, the market risk premium is 4.70%, and Kohers Enterprises has a beta of 1.10. What is the required rate of return on Kohers' stock?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:52 pm ad1c9bdddf
    https://brainmass.com/business/capital-asset-pricing-model/required-rate-of-return-on-stock-304847

    Solution Preview

    The real risk-free rate is 2.00%, investors expect a 3.00% future inflation rate, the market risk premium is 4.70%, and Kohers Enterprises has a ...

    Solution Summary

    Uses CAPM to compute the required rate of return on stock.

    $2.19

    ADVERTISEMENT