question archive Billings, Inc
Billings, Inc
Subject:FinancePrice:1.87 Bought7
Billings, Inc. common stock has a beta of 1.2. If the expected risk free return is 4% and the expected market risk premium is 9%, what is the expected return on Billing's stock?
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
The CAPM says the expected return is equal to the risk free rate plus beta times the market risk premium. So 4 + 1.2*9= 14.8%.
