pls type not write

Question

Question

business finance

Answer 1

Answer #1

Part A:

Required ret = Risk Free Ret + Beta [ Market risk Premium ]

= 2.75% + 0.5 [ 6% ]

= 2.75% + 3%

= 5.75%

Part B:

If Expected Ret (6%) > Required Ret(5.75%), stock is Under Priced and adviced to buy it.

Answer 2

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