WestJet Stock Has a Beta of 1

question 26

Multiple Choice

WestJet stock has a beta of 1.5.If the risk-free rate is 2.4%,and the expected market return is 10%,what is the expected return of WestJet stock,according to the CAPM?

• A)13.8%
• B)17.4%
• C)21.0%
• D)11.4%
• E)15.0%

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Definitions:

Shareholder's Direct Suit

A legal action initiated by a shareholder on behalf of themselves against a corporation, typically for mismanagement or violation of rights.

Shareholder

An individual or entity that owns shares in a corporation, giving them ownership interests and possibly voting rights.

Damages

Financial compensation that a person or organization is ordered to pay to another as restitution for harm or injury suffered.

Delaware

A U.S. state located on the Atlantic Coast in the mid-Atlantic region, known for its business-friendly corporation laws.