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Homework #5C (CAPM, Beta portfolio, Portfolio expected return) - final.docx

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Q-1. King Farm Manufacturing Company’s common stock has a beta of 2.42. If the risk-free rate is 2.97percent, and the market return is 8.53 percent, calculate the required return on King FarmManufacturing’s common stock.Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units”box)
Q-2. Try to determine the required rate of return on Tilden Woods Corporation’s common stock. Thefirm’s beta is 1.75. The rate on a 10-year Treasury bond is 3.54 percent, and the market risk premium is7.63 percent.Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units”box)

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Term
Spring
Professor
GEWIRTZ
Tags
risk free rate, Market Return

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