Question #318587
The difference in returns between Treasury bills and the FTSE Bursa Malaysia (FBM) KLCI is 5.50%. The Treasury bill rate is 3% . Krogh Enterprise has a beta of 1.60. What's the market return?
What is the required rate of return of Krogh Enterprise?
Expert's answer
market return is;
5.50 + 3=8.50%
What is the required rate of return of Krogh Enterprise?
(5.5\times 1.60) +3=11.80%
