Problemlinke motors has a beta of 130 and the t-bond rate, Ask an Expert

Accounting

Problem:

Linke Motors has a beta of 1.30, and the T-bond rate is 6.5%. The annual return on the stock market during the past 3 years was 15.00%, but investors expect the annual future stock market return to be 13.00%.

Requirement:

Question: Based on the SML, what is the firm's required return?

Note: Please provide through step by step calculations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169500

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