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The beta of company Myers’s stock is 2. The annual risk-free rate is 2% and the annual market premium is 8%. What is the expected return for Myers’ stock? A. 14% B. 25% C. 20% D. 18

Respuesta :

Ritmeks

Answer:

18%

Explanation:

Myers's stock has a beta of 2

The annual risk free rate is 2%

The annual market premium is 8%

Therefore, the expected return for Myers's stock can be calculated as follows

= 2% + (2×8%)

= 2% + 16%

= 18%

Hence the expected return for Myers's stock is 18%

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