Explain finding required rate of return using capm formula

Reference no: EM1315144

Explain Finding required rate of return using CAPM formula

A. During 2007, a firm has sold 5 assets described below.

Calculate the tax liability on the assets. The firm pays a 40 percent tax rate on ordinary income.

Asset	Purchase Price	Sale Price
1	$10,000	$12,000
2	$50,000	$40,000
3	$37,500	$50,000
4	$ 3,000	$ 3,500
5	$15,000	$12,000

B. Russo's Gas Distributor, Inc. wants to determine the required return on a stock portfolio with a beta coefficient of 0.5.

Assuming the risk-free rate of 6 percent and the market return of 12 percent, compute the required rate of return

Reference no: EM1315144

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