A stock has a beta of 1.08, the expected return on the market is 10.9 percent, and
Question:
A stock has a beta of 1.08, the expected return on the market is 10.9 percent, and the risk-free rate is 2.7 percent. What must the expected return on this stock be?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 60% (10 reviews)
CAPM states the relationship between the ...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Question Posted:
Students also viewed these Business questions
-
Consider the following AR(2) process: (1-0.6L-0.2L) Xt = Z where {Z : t Z) is a white noise sequence, where E Z = 0 and EZ = > 0 for each te Z. (a) Show that this process is weakly stationary: (b)...
-
This case study on project evaluation is applicable for beginning courses in corporate finance or finance strategy. Two alternative investment options are available to evaluate. Challenges are...
-
The beta for a certain stock is 1.15, the risk-free rate is 5 percent, and the expected return on the market is 13 percent. Complete the following table to decompose the stocks return into the...
-
Write a paper about operations of Morning Star homes, a construction company. How you are progressing in your Project Management Plan. When is it appropriate to "crash" a project and what are the...
-
Windows contains a hypervisor which allows multiple operating systems to run simultaneously. This is available on clients, but is far more important in cloud computing. When a security update is...
-
Meteora, Inc., has an issue of preferred stock outstanding that pays a $3.75 dividend every year, in perpetuity. If this issue currently sells for $81 per share, what is the required return?
-
Bravman Clothing sells high-end clothing products and is launching a service in which they use a same-day courier service to deliver purchases that customers have made by working with one of their...
-
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,000,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized...
-
Project A is a 500 megawatt (MW) coal-fired electric power plant in one emerging country in South East Asia. It is one of many electricity power assets recently privatised by the government. Two...
-
The Blacks moved from Maine to Nevada. As a result, they sold their house in Maine on January 4, 2018. They originally paid $76,000 for the home on July 3, 1993, but managed to sell it for $604,000....
-
A stock has an expected return of 10.9 percent, the risk-free rate is 3.1 percent, and the market risk premium is 6.9 percent. What must the beta of this stock be?
-
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.27 and the total portfolio is equally as risky as the market, what must the beta be for...
-
A home appliances company decides to produce an all-in-one water treatment system for treating tap water. It contains a filter to remove suspended solids, a reverse osmosis (RO) membrane unit to...
-
Fine Teas operates its petty cash account on the imprest system. It is maintained at a figure of 140, with the balance being restored to that amount on the first day of each month. At 30 April 2012...
-
What does stochastic mean in stochastic frontier effi ciency estimation? Give several real-life examples of events that could shift the production frontier.
-
A company maintains its non-current assets at cost. A provision for depreciation account is used for each type of asset. Machinery is to be depreciated at the rate of 15 per cent per annum, and...
-
LinkedIn, the professionally-oriented online social network, was acquired in 2016 by technology giant Microsoft for $26.2 billion. Although Microsoft was partly motivated by LinkedIns top-notch...
-
(a) What is the meaning of depreciation? (b) Give three reasons why depreciation may occur. (c) Name two methods of depreciation. (d) In what way do you think the concept of consistency applies to...
-
Radiohead Inc. produces electronic components for sale to manufacturers of radios, television sets, and digital sound systems. In connection with her examination of Radiohead's financial statements...
-
1. Firms may hold financial assets to earn returns. How the firm would classify financial assets? What treatment will such financial assets get in the financial statements in accordance with US GAAP...
-
Use the sustainable growth rate equations from the previous problem to answer the following questions. Grendl, Inc., had total assets of $410,000 and equity of $265,000 at the beginning of the year....
-
First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a $4,800 deposit in each bank, how...
-
Compute the future value of $1,625 continuously compounded for a. Five years at an annual percentage rate of 14 percent. b. Three years at an annual percentage rate of 6 percent. c. Ten years at an...
-
3. Show that : -3t = y 3 sin(t) cos(t) + e is a solution to the differential equation y' + 3 y 10 sin(t)
-
The United States, Austrailia, Canada, and the United Kingdom cluster high on individualism but low on power distance on Hofstede\'s cutlutral graph. What does this mean to someone looking to market...
-
Mini-garden project Week one of the mini-garden project involved Sacha and her fellow pre-schoolers planting sunflower seeds into the outdoor garden bed. Each child in the activity has been assigned...
Study smarter with the SolutionInn App