Calculate cost of capital of a stock according to CAPM model if risk-free rate is 8% ,

Fantastic news! We've Found the answer you've been seeking!

Question:

Calculate cost of capital of a stock according to CAPM model if risk-free rate is 8% , market return 12% and Beta of stock 1.5.

Related Book For answer-question

Intermediate Financial Management

ISBN: 9780357516669

14th Edition

Authors: Eugene F Brigham, Phillip R Daves

See More Books

Posted Date: Apr 06, 2024 09:25 AM

See More Questions

Use the right endpoints of the Riemann sums to estimate the area under the graph of f ( x ) = x 2 + 1 over the interval [2, 10], using n = 4 rectangles. Sketch the curve and the representation of the...
Consider the following database schema used to track student advising at Franklin University. The database has been in use for several years and contains thousands of entries. Primary keys are...
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
A rainfall event occurs over a 150-square-mile watershed. The following incremental depths of precipitation, interception, and infiltration are estimated during a 30-min storm in 5-min increments....
In general, nonmolecular solids have much higher melting points than molecular solids. Why is this so?
Craxton Engineering will either purchase or lease a new $756,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line basis over seven years. Craxton can lease the...
The city of Belgrade, Serbia, is contemplating building a second airport to relieve congestion at the main airport and is considering two potential sites; X and Y. Hard Rock Hotels would like to...
23.Radiation from hydrogen gas excited to first excited state is used for illuminating certain metallic plate. When the same plate is exposed to the radiation from some unknown hydrogen like gas...
The concession stand made a profit of $135 on Saturday and lost $12 on Sunday. How much profit did the concession stand make over the weekend?
In a laboratory filtration it takes 10 min to filter 2 L of slurry and 18 min to filter 3 L of slurry. Does the filter medium offer any resistance?
In a rising film evaporator, if the heat transfer coefficient is proportional V0.6, where V is the rising vapor velocity. If the throughput through the reactor has to be increased by 25%, how many...
In radiation heat transfer, if the temperature of the black body increases from 250 to 260C, what will be the increase in the radiation energy?
In spray drying if the particle size is reduced from 120 microns to 100 microns, what will be the increase in heat transfer rate?
If a copper cylinder of length 5 cm and diameter of 2 cm is heated from one end at 100C, while the other end is at 30C, what is the rate of heat transfer. If the material is made of iron what will be...
From the first reading (The Real World of Liberalism), what is the main difference in thinking between liberals and conservatives about the nature of people and the nature of society? How are their...
Provide examples of a situations in which environmental disruptions affected consumer attitudes and buying behaviors.
Which depends on gravityweight or mass?
Where would your weight be greateron Earth or on the Moon? Where would your mass be greater?
One kg weighs 10 N on Earth. Would it weigh more or less on the Moon?

Calculate cost of capital of a stock according to CAPM model if risk-free rate is 8% ,

Question:

Expert Answer:

The Capital Asset Pricing Model CAPM formula can be used to calculate ... View the full answer

Intermediate Financial Management

Students also viewed these finance questions