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Sportsaholic 04/19/17 4:49:02 PM #1: |
You are considering an equity investment in Aloha Timeshare Corp. You read a market report on the stock written by a top analyst in the timeshare industry that put the stock's beta at 1.5. If long term U.S. Treasuries are currently yielding 5.00% and the expected return for the S&P 500 is 10.5%, what level of return would you require for investing in Aloha Corp's common stock?
Not sure where to start. It doesn't seem like a challenging question, but my brain just isn't working. --- Bills, Sabres, Bison, UB Bulls + Buffalo Braves/SD/LA Clippers + NY Yankees Buffalo -> LA -> Honolulu ... Copied to Clipboard!
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Unsugarized_Foo 04/19/17 4:50:45 PM #2: |
Time shares are always bad
--- "All I have is my balls and my word, and I don't break them for anyone!"-Tony Montana ... Copied to Clipboard!
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Sativa_Rose 04/19/17 4:52:20 PM #3: |
You are probably supposed to use CAPM
http://www.investopedia.com/terms/c/capm.asp Required return = Risk Free Rate + Beta of the security * (Expected Market Return - Risk Free Rate) You've got all that info right there in the problem ;) --- I may not go down in history, but I will go down on your sister. ... Copied to Clipboard!
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Sportsaholic 04/19/17 4:53:11 PM #4: |
Sativa_Rose posted...
You are probably supposed to use CAPM Thanks! I'll see if I can figure it out from that. --- Bills, Sabres, Bison, UB Bulls + Buffalo Braves/SD/LA Clippers + NY Yankees Buffalo -> LA -> Honolulu ... Copied to Clipboard!
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PoopPotato 04/19/17 4:53:12 PM #5: |
... Copied to Clipboard!
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