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    jbru's Avatar
    jbru Posts: 1, Reputation: 1
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    #1

    Jul 14, 2007, 08:36 AM
    Managerial Finance
    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's Avatar
    Hermansherman Posts: 37, Reputation: 4
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    #2

    Jul 16, 2007, 05:48 AM
    Quote Originally Posted by jbru
    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
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