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(Capital Asset Pricing​ Model)  The expected return for the general market is 10.5 ​percent, and the risk premium in the market is 6.8 percent. ​ Tasaco, LBM, and Exxos have betas of 0.809​, 0.677​, and 0.578​, respectively. What are the appropriate expected rates of return for the three​ securities?

(Capital Asset Pricing​ Model)  The expected return for the general market is 10.5 ​percent, and the risk premium in the market is 6.8 percent. ​ Tasaco, LBM, and Exxos have betas of 0.809​, 0.677​, and 0.578​, respectively. What are the appropriate expected rates of return for the three​ securities?

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter12: Valuation: Cash-flow Based Approaches
Section: Chapter Questions
Problem 12PC
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(Capital Asset Pricing​ Model)  The expected return for the general market is
10.5
​percent, and the risk premium in the market is
6.8
percent. ​ Tasaco, LBM, and Exxos have betas of
0.809​,
0.677​,
and
0.578​,
respectively. What are the appropriate expected rates of return for the three​ securities?
 
 
 

Question content area bottom

Part 1
The appropriate expected return of Tasaco is
enter your response here​%.
​(Round to two decimal​ places.)
Part 2
The appropriate expected return of LBM is
enter your response here​%.
​(Round to two decimal​ places.)
Part 3
The appropriate expected return of Exxos is
enter your response here​%.
​(Round to two decimal​ places.)
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