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using walmart as the company and in 250 to 300 words

 

CAPM says that the expected return of an asset or a portfolio is the  rate on a risk-free security plus a risk premium. For this discussion,  you will practice calculating the expected return of an asset for your  company.

Here is the recap of the model:

You can find the beta for your company in Yahoo! Finance (look up  your company and go to Key Statistics) or Google Finance. Or calculate  your own. See this article: 

Calculate Stock Beta with Excel 

For the risk-free rate, look up the Treasury bill interest rate  (select what you think is the appropriate rate) and the risk premium (do  some research; start with the most recent Ibbotson Associates report on  market premium).

For this post, 1) list your company, 2) company beta, 3) your  risk-free rate, and 4) the risk premium rate. Explain your reasoning for  selecting the values of your risk-free rate and the market premium. Is  your calculated expected return value reasonable for your company?


    • 9 years ago
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