ov eraga cej unnc Stock is 141 5 and the cist free rate is 6

ov eraga cej unnc Stock is 14.1 5% and the cist- free rate is 6.43%. The risk Premiuim on the sAocl al 7.st /o e) 10.39 %

Solution

Requires return on stock using CAPM = risk free rate + beta ( market risk premium)

Since beta is not mentioned, i am assuming the beta to be 1.

0.1415 = 0.0663 + 1 ( Market risk premium)

0.1415 - 0.0663 = market risk premium

Market risk premium = 0.0752 or 7.52%