Assume the risk free rate is at 6 percent and the market risk premium is 6...

Question

Question

Assume the risk free rate is at 6 percent and the market risk premium is 6 percent. The stock of physician care network has a beta of 1.5.

business finance

Answer 1

Answer #1

According to the CAPM,

Required Return = Risk-free Rate + [Beta * Market Risk Premium]

= 6% + [1.5 * 6%] = 6% + 9% = 15%

Answer 2

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