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Author Question: You have been given an opportunity to invest in a stock. Recent trends suggest that a one percent ... (Read 13 times)

Evvie72

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on: Jul 1, 2018
You have been given an opportunity to invest in a stock. Recent trends suggest that a one percent rise in the stock market leads to approximately a two and one-half percent rise in the price of this stock.
 
  The real risk-free rate currently stands at 6 and stocks on average have provided 12 returns. Using the capital asset pricing model, determine the appropriate discount rate for the stock in question.

Question 2

Those who engage in the practice of discrimination today are generally quite blatant.
 
  Indicate whether the statement is true or false


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sylvia

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Reply #1 on: Jul 1, 2018
Answer to Question 1

Discount rate = rf + (rm - rf)
 = 2.5
R = 6 + 2.5(12  6 )
R = 6 + 15
= 21

Answer to Question 2

F


Evvie72

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Reply 2 on: Jul 1, 2018
:D TYSM

xiaomengxian

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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