Unformatted text preview: 4.1 + 7.6 = 11.7% b. Expected return on stocks now: 6.5 + 4.5 = 11% Expected return on stocks based on historical numbers: 5.2% + 6.5% = 11.7% c. Treasury bill returns seem to fluctuate, and current stock returns are better predictors of future stock returns than historical return rates. Problem 7-3 (10% - 4%) + 2% = 8% So, the expected return for W.M. Hung Corporation is 8%....
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- Fall '08
- Corporate Finance, Treasury bill, stock returns, W.M. Hung Corporation, historical return rates, treasury bills return