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You have done a thorough study of the economy and of Stock X and concluded the following ...

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You have done a thorough study of the economy and of Stock X and concluded the following ...

You have done a thorough study of the economy and of Stock X and concluded the following probabilities:

•	having a boom next year is 20.0%

•	having a stable economy is 55.0%

•	having a recession is 25.0%.

You have also found the price of Stock X will be:

•	$45 if there is a boom

•	$25 if the economy is stable

•	$15 if there is a recession.

What is the ex ante expected return on Stock X if it is currently selling for $24?

▸ 26.50%

▸ -9.43%

▸ 10.42%

▸ 18.06%

Textbook

Corporate Finance

Edition: 5^th

Author: Booth

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unrendezvous Author

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Thank you, thank you, thank you!

patod1

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I appreciate what you did here, answered it right Smiling Face with Open Mouth

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Thanks

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