QUESTION6 If we assume a market risk premium of 8%, and, an expected return on t

Question

QUESTION6 If we assume a market risk premium of 8%, and, an expected return on the S & P 500 of 12% what would be the required rate of return for Apple if the 10-year Treasury Note is 4%? Apple Inc. (AAPL) NasdaGS-NasdaGS Real Time Price Cumency in US Add to watchlist 140.94-030 140.21%) As of 1 40PM EDT Maet ope Summary Conversations Statistics ProleFinancials Options Holders Historical Data Analysts 4064 Market Cap Previous Close Open Bid Ask Day's Range 138.62-141.22 Eamings Date 52 Week Range 8947-142.0 3939 Beta 1.45 42 00 141.07x14500 PE Rato 16.92 TTM EPS(TTM) s41.0@n Apr 24, 2017-Ap Dnidend & 15546625 ExDnidend ,16337 ty Target E 2, 2017 2.28 (1.62%) N/A 44 48 139 00 38 00 Date Related Video a. 16.92% b. 16.275% c. 15.6% d. 12% e. 9.896

Explanation / Answer

Required Return (r) Rf+×Rp Here, Risk free rate of return (Rf) 4.00% Beta of the stock ()                 1.45 Market risk premium (Rp) 8.00% Required Return (r) 15.6% 4%+1.45*8%

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