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Calculate the required rate of return for xyz inc using the


CAPM and Required Return

Calculate the required rate of return for XYZ Inc. using the following information:

  • The investors expect a 3.0 percent rate of inflation.
  • The real risk-free rate is 2.0 percent.
  • The market risk premium is 6.0 percent.
  • XYZ Inc. has a beta of 1.7.
  • Over the past 5 years, the realized rate of return has averaged 13.0 percent.

Please show any calculations used.

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Finance Basics: Calculate the required rate of return for xyz inc using the
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