How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Steven, M.Acc. Your Own Question

Steven, M.Acc.
Steven, M.Acc., Instructor
Category: Business and Finance Homework
Satisfied Customers: 755
Experience:  Instructor and accountant. Master's degree in Accounting.
Type Your Business and Finance Homework Question Here...
Steven, M.Acc. is online now
A new question is answered every 9 seconds

A stock has a beta of .85, the expected return on the market

This answer was rated:

A stock has a beta of .85, the expected return on the market is 11 percent, and the risk-free rate is 4.1 percent. What must the expected return on the stock be?
Hi again,

Thanks for requesting me!

Rs = the stock's expected return
Rf = the risk-free rate
Rm = the expected return on the market
β = the stock's beta

Rs = Rf + β(Rm – Rf)
Rs = 0.041 + 0.85(0.11 – 0.041)
Rs = 0.041 + 0.05865
Rs = 0.09965
Rs = 9.965%
Steven, M.Acc. and 2 other Business and Finance Homework Specialists are ready to help you