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jbru
Jul 14, 2007, 08:36 AM
Can someone show me how to calculate the following: risk-free rate of return that is 15.51% based on expected inflation premium of 2.54%. The expected return on the market is 12.8%. What is the required rate of return for common stock that has a beta of 1.35?
Hermansherman
Jul 16, 2007, 05:48 AM
Can someone show me how to calculate the following: risk-free rate of return that is 15.51% based on expected inflation premium of 2.54%. The expected return on the market is 12.8%. What is the required rate of return for common stock that has a beta of 1.35?

Do you have a typo in your question?
How can the risk-free rate be 15.51% if the expected return on the market is 12.8%?
Herman