For the equity of Delaware East, $\beta$=1.25.If the expected return on the market is 15% and the risk-free rate is 5%, what is the expected return on the firm's equity?

Question

Quizplus · Accepted Answer

The expected return on the firm's equity can be calculated using the Capital Asset Pricing Model (CAPM): $E(R_i) = R_f + \beta(E(R_m) - R_f)$. Substituting the given values: $E(R_i) = 5\% + 1.25(15\% - 5\%) = 5\% + 12.5\% = 17.5\%$.

For the Equity of Delaware East β\betaβ =125If the Expected Return on the Market Is 15% and Return

For the Equity of Delaware East $\beta$ =125If the Expected Return on the Market Is 15% and Return