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30 June, 01:19

The stock of Wiley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?

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  1. 30 June, 01:54
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    10.93%

    Explanation:

    Using CAPM formula, we have the following:

    Expected return = risk-free rate + Beta x (Market risk premium)

    = 3.2% + 0.92 x 8.4% = 10.93%
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