Question 13.8: Suppose the risk-free rate is 4 percent, the market risk pre...

Fundamentals of Corporate Finance

Suppose the risk-free rate is 4 percent, the market risk premium is 8.6 percent, and a particular stock has a beta of 1.3. Based on the CAPM, what is the expected return on this stock? What would the expected return be if the beta were to double?

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