Lisa, an analyst at Avangard Electric (AE), models the stock of the company. Suppose that...
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Lisa, an analyst at Avangard Electric (AE), models the stock of the company. Suppose that the risk-free rate TRF = 5%, the required market return TM - 10%, the risk premium for small stocks (SMB - 3.2%, and the risk premium for value stocks ThML - 4.8%. Suppose also that Lisa ran the regression for Avangard Electric's stock and estimated the following regression coefficients: ane = 0.00, bar = 1.2, CAE = -20.4, and dae = -1.3. If Lisa uses a Fama-French three-factor model, then which of the following values correctly reflects the stock's required return? -65.52% -60.52% -72.52% -50.48%
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