Lisa, an analyst at Avangard Electric (AE), models the stock of the company. Suppose that...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Lisa, an analyst at Avangard Electric (AE), models the stock of the company. Suppose that the risk-free rate TRF = 5%, the required market return TM - 10%, the risk premium for small stocks (SMB - 3.2%, and the risk premium for value stocks ThML - 4.8%. Suppose also that Lisa ran the regression for Avangard Electric's stock and estimated the following regression coefficients: ane = 0.00, bar = 1.2, CAE = -20.4, and dae = -1.3. If Lisa uses a Fama-French three-factor model, then which of the following values correctly reflects the stock's required return? -65.52% -60.52% -72.52% -50.48%
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
