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Find the expected returns of following stocks by using the CAPM equation: 1. Facebook (FB)...

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Accounting

Find the expected returns of following stocks by using the CAPM equation:

1. Facebook (FB)

2. Wells Fargo & Company (WFC)

3. Essentra plc (FLRAF)

Provide explanation and references of following:

  1. Interpret the expected return you get from CAPM equation. How beta value affects the expected return of the stock.
  2. From where you are obtaining value of beta.
  3. Are you using 2 years or 5 years beta value? Explain your reasoning.
  4. What is the source of your risk-free rate and what is your reason to select it?

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