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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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This note was uploaded on 07/10/2011 for the course FI 360 taught by Professor Tavbin during the Fall '08 term at Park.
- Fall '08
- Corporate Finance