You Have Been Given an Opportunity to Invest in a Stock

question 21

Essay

You have been given an opportunity to invest in a stock. Recent trends suggest that a one percent rise in the stock market leads to approximately a two and one-half percent rise in the price of this stock. The real risk-free rate currently stands at 6% and stocks on average have provided 12% returns. Using the capital asset pricing model, determine the appropriate discount rate for the stock in question.

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Definitions:

Fake Personal Brand

A fabricated or exaggerated representation of oneself on professional or social media platforms, lacking authenticity.

Identify

The act of recognizing or establishing something's identity or nature.

Three Things

A phrase often used to signify the importance of focusing on three key points or priorities for efficiency or clarity.

Personal Brand Audit

An evaluation process of one’s public image and online presence to align it with their desired persona or professional goals.