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    Capital-asset-pricing model and WACC

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    Suppose the expected return on the market portfolio is 14.7 % and the risk-free rate is 4.9 %. Morrow Inc. stock has a beta of 1.3
    Assume the capital-asset-pricing model holds.

    a. What is the expected return on Morrow's stock?

    b. If the risk-free rate decreases to 4 %, what is the expected return on Morrow's stock?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:36 pm ad1c9bdddf
    https://brainmass.com/business/weighted-average-cost-of-capital/capital-asset-pricing-model-and-wacc-67493

    Solution Summary

    Expected return on the market portfolio using capital-asset-pricing model and WACC

    $2.19

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