X Corporation: Expected return on project using CAPM
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The market capitalization for X Corporation is $10 billion.
The estimated beta for its new project is 1.25
The treasury bill rate is 5%
The project's IRR is 14%
The expected rate of return on the S&P 500 is 13%.
What is the expected return on the project using CAPM?
(Assume no taxes)
A) 13%
B) 14.6%
C) 15%
D) 16.25%
E) 18%
F) 21.25%
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Solution Summary
The expected return on a project using CAPM is determined. Market capitalization is given.
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
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