In finance, the capital asset pricing model (CAPM) is a model used to determine a theoretically appropriate rate of return of an asset. Please use the CAPM model to solve the following problem.
Newco's beta is 1.3 Assume the expected return on the marketis 9.9% and the risk-free rate is 3%. What is the expected return on Newco's stock using the capital asset pricing model (CAPM)?