Answer:
9.41%
Explanation:
Wiley United has a beta of 1
The market risk premium 11.5%
= 11.5/100
=0.115
Risk free rate is 2.3%
= 2.3/100
= 0.023
Therefore the expected rate of return can be calculated as follows
Expected rate of return= Risk free rate+beta(market return-risk free rate)
= 0.023+1(0.115-0.023)
= 1.023(0.092)
= 0.0941×100
=9.41%
Hence the expected return on the stock is 9.41%
