Newmont Mining (NYSE: NEM) has an estimated beta of 0.2. The risk - free rate of

Question:

Newmont Mining (NYSE: NEM) has an estimated beta of – 0.2. The risk - free rate of return is 4.5 percent, and the equity risk premium is estimated to be 7.5 percent. Using the CAPM, calculate the required rate of return for investors in NEM.

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

Step by Step Answer:

Related Book For book-img-for-question

Equity Asset Valuation

ISBN: 978-0470571439

2nd Edition

Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen

See More Books

Question Posted: Oct 01, 2018 12:57 PM

See More Questions

Bartholomew Industries common stock has an estimated beta of 2.2. Assuming you could earn 9 percent on U.S. Treasury securities and the market risk premium is 8 percent, should you buy the stock?
Bostonmarket.com stock has an estimated beta of 1.5. The stock pays no dividend and is not expected to pay one for the foreseeable future. The current price of the stock is $50. You expect this price...
Relever Inc. has a debt-to-equity (D/E) ratio of 0.3; its target D/E is 1.6. Relever currently has an estimated beta of 1.1. Relever's estimated tax rate is 35 percent. What is the estimate of...
1. The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary...
You are given the following payoff table (in units of thousands of dollars) for a decision analysis problem. a. Which alternative should be chosen under the maximax criterion? b. Which alternative...
The file Cereals contains the calories and sugar, in grams, in one serving of seven breakfast cereals: a. Compute and interpret the coefficient of correlation, r. b. At the 0.05 level of...
Describe how you can use www.yellowpages.com to create a sample in the state of New York by using systematic sampling technique.
One cause of the downtime in Problem 3 was traced to a specific piece of computer hardware. Management believes that switching to a different hardware component will result in the following...
You are considering an investment that will pay $22845 in 14 years. If the interest rate is 10.99%, what is the most you should be willing to invest today?
Determine the mobility (degrees of freedom) of the mechanism shown in Fig. 5.39 (a) and (b) using Kutzbach mobility criterion and classify them. Determine the mobility (degrees of freedom) of the...
The estimated factor sensitivities of TerraNova Energy to Fama - French factors and the risk premia associated with those factors are given in the following table: A. Based on the Fama - French...
An analyst wants to account for financial distress and market capitalization as well as market risk in his cost of equity estimate for a particular traded company. Which of the following models is...
Determine whether the trusses of Probs. 6.14, 6.15, and 6.23 are simple trusses.
Split Bean Corporation is formed to own and operate Split Bean Coffee Stands. The articles of incorporation prohibit Split Bean from selling or leasing any of its property without the approval of a...
Saskia goes to Dons Salon for a haircut. Behind a plant on a table in the waiting area, Saskia finds a wallet containing $5,000. The party entitled to possession of the wallet is a. Saskia. b. Don....
What is the possible consequence to a lender of failing to record a mortgage?
When a broker deals with an applicant for insurance, the broker acts as an agent for whom?
What is a co-surety?
Go to the home page of CoolHunters (www.thecoolhunter.net). Look at examples posted in the store subpage (under the design tab). How can this information of latest trends assist with store layout,...
Write electron configurations for the following ions, and determine which have noble-gas configurations: (a) Cd2+ (b) p3- (c) Zr4+ (d) Ru3+ (e) As3- (f) Ag+
Using the build-up method and assuming that no adjustment for industry risk is required, calculate an equity discount rate for a small company, given the following information: Equity risk premium =...
Using the capitalized cash flow method (CCM), calculate the fair market value of 100 percent of the equity of a hypothetical company, given the following information: Current years reported free cash...
You have been asked to value Pacific Corporation, Inc., using an excess earnings method, given the following information: Working capital balance = $2,000,000 Fair value of fixed assets = $5,500,000...
A complex pair of eigenvalues are shown on the s-plane below. For this pair of eigenvalues, Wn ? W = ? damping ratio = ? time constant = ? X 2 -1 0 X -2 If r(t) is a step with magnitude 10, Use...
F m J, r Motor k = k T b R www C
Consider the system U(s)G(s) 20 Y(s) with transfer function G(s) = . . Let u(t) and y(t) be the s+2s+10 inverse Laplace transform of U(s) and Y(s), respectively. (2a) Find the differential equation...

Newmont Mining (NYSE: NEM) has an estimated beta of 0.2. The risk - free rate of

Question:

Step by Step Answer:

The required return is given by r 0045 020075 45 15 30 This ...View the full answer

Equity Asset Valuation

Students also viewed these Business questions