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deircr3
Lv 4
deircr3 asked in Science & MathematicsMathematics · 7 years ago

Need help finding the required rate of return? 10 points?

MFI Inc has a beta of .86. If the expected market return is 11.5% and the risk free rate is 3%, what is the appropriate required return of MFI using CAPM? How do you find the risk free rate which is 7.5? I tried dividing, multiplying .86 and 11.5 but nothing.

1 Answer

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  • xyzzy
    Lv 7
    7 years ago
    Favorite Answer

    required return = (market return - Risk free rate) * beta.

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