Opportunity Cost of Capital
Example - continued
The stocks expected payoff leads to an expected
return.
Expected return expected^ profit^11095.^9565.^65. 15 or 15%
Expected payoff C 1 80 1003 140 $ 110
= = − =
= = + + =
investment
Opportunity Cost of Capital
Example - continued
The stocks expected payoff leads to an expected
return.
Expected return expected^ profit^11095.^9565.^65. 15 or 15%
Expected payoff C 1 80 1003 140 $ 110
= = − =
= = + + =
investment