Bell Weather, Inc. has a beta of 1.25. - 11290

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Request Description

Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock?

A.   15.62% B.   20.62% C.   14.37% D.   9.37% 

Solution Description

Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock?