What is the required rate of return on aas


1. Required Rate of Return

AA Corporation’s stock has a beta of 1.0. The risk-free rate is 3% and the expected return on the market is 13%. What is the required rate of return on AA's stock? Round your answer to two decimal places

2. Fama-French Three-Factor Model

An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 8%, the return on the SMB portfolio (rSMB) is 2.9%, and the return on the HML portfolio (rHML) is 5.6%. If ai = 0, bi = 1.2, ci = -0.4, and di = 1.3, what is the stock's predicted return? Round your answer to two decimal places. %

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Financial Management: What is the required rate of return on aas
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