Wrote Analysts has just used the CAPM model to compute an rE of 18.679% for the VaperWare company. It found rE by, among other things, computing Beta from a regression between the historical stock returns

Wrote Analysts has just used the CAPM model to compute an rE of 18.679% for the VaperWare company. It found rE by, among other things, computing Beta from a regression between the historical stock returns of Vaperware and the SPY ETF. The R2 of this regression was 12%.

Required:
What could possibly be problematic with WroteAnalysts' estimated rE for the VaperWare company?

1 Answer

Wrote Analysts has just used the CAPM model to compute an rE of 18.679% for the VaperWare company. It found rE by, among other things, computing Beta from a regression between t…

Please log in or register to add a comment.

Please log in or register to answer this question.

1 Answer

Please log in or register to add a comment.

Related questions

Categories

Other Questions