A stock has a beta of 0.8. Assume that the risk-free rate is 5.5% and that the
Question:
A stock has a beta of 0.8. Assume that the risk-free rate is 5.5% and that the market risk premium is 6%. What is the stock’s required rate of return?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (1 review)
The stocks required rate of return can be calculated using the Capital Asse...View the full answer
Answered By
OTIENO OBADO
I have a vast experience in teaching, mentoring and tutoring. I handle student concerns diligently and my academic background is undeniably aesthetic
4.30+
3+ Reviews
10+ Question Solved
Related Book For
Intermediate Financial Management
ISBN: 9781337395083
13th Edition
Authors: Eugene F. Brigham, Phillip R. Daves
Question Posted:
Students also viewed these Business questions
-
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...
-
Oct. 31. Declared semiannual dividends of $1.30 per share on the preferred stock and $0.07 per share on the common stock (before the stock dividend). In addition, a 1% common stock dividend was...
-
13. What is a lower bound for the price of 3-month call option on a non- dividend-paying stock when the stock price is $50, the strike price is $45, and the 3-month risk-free interest rate is 8%?...
-
Describe, draw, the curve with the following parametric equations in the cylindrical co-ordinate space: r = 5, z = 2,0 = t
-
What is the total charge of all the electrons in a 25-kg bar of aluminum? (Aluminum has 13 electrons per atom and an atomic mass of 27 u.)
-
Consider earth's atmosphere to be spherically symmetric above the surface, with index of refraction \(n=n(r)\), where \(r\) is measured from the center of the earth. Using polar coordinates \(r,...
-
1. Identify an entrepreneur in your area you would like to interview. 2. Contact the person you have selected and make an appointment. Be sure to explain why you want the appointment and to give a...
-
The Sanding Department of Ortiz Furniture Company has the following production and manufacturing cost data for March 2010, the first month of operation. Production: 12,000 units finished and...
-
QUESTION IO.17 (Applicationofdecline invaluemethods) George Bensonisa45-year-oldresident taxpayerwhohasconducted businessasanITProgrammerfor8yearsandhasannualturnover below...
-
What are the differences among the three forms of the EMH?
-
How can a firms managers influence market risk as reflected in beta?
-
On September 11, 2012, Home Store sells a mower for $500 with a one- year warranty that covers parts. Warranty expense is estimated at 8% of sales. On July 24, 2013, the mower is brought in for...
-
Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project A Co -36,500 B -56,500 G G NPV at 11% 26,200 26,200 +$ 8,368 39,500 39,500 +11,145 a. Calculate IRRs for A and B. Note:...
-
Accrual basis accounting is defined as: (Check all that apply.) an accounting system that uses the adjusting process to recognize revenues when earned and expenses when incurred. an accounting system...
-
Suppose a 5 0 0 ml beaker is filled to the brim with ethyl alcohol at a temperature of 5 degrees celsius. The beaker is made out of tempered glass and has no thermal expansion. What volume in ml will...
-
A thin wire, of uniform composition, of mass 6m and length 6L is bent so that its final shape is that of a regular hexagon. Determine the moment of inertia with respect to of an axis that passes...
-
What's this recapture thing all about, anyway? We tell people that if they sell an asset (either a capital asset or a Sec. 1231 business asset) at a gain, if held more than one year, we will give...
-
For the hook support of Problem 2.11, determine, using trigonometry, the magnitude and direction of the resultant of the two forces applied to the support knowing that P = 10 lb and = 40. Problem...
-
Representative data read from a plot that appeared in the paper Effect of Cattle Treading on Erosion from Hill Pasture: Modeling Concepts and Analysis of Rainfall Simulator Data (Australian Journal...
-
CompuTech, Inc., makes circuit boards for microcomputers. It is evaluating two possible suppliers of electronic memory chips. The chips do the same job. Although manufacturing quality has been...
-
Go to the library (or get on the Internet) and find (in some government publication or website) three marketing-oriented facts on international markets that you did not know existed or were...
-
Texmac, Inc., has an idea for a new type of weaving machine that could replace the machines now used by many textile manufacturers. Texmac has done a telephone survey to estimate how many of the...
-
Show that the function is a solution to y(x) = = Ce + Czex d y dy 2y = 0 dx dx for any choice of the constants C1 and C2. Then, determine C1 and C2 so that the initial conditions y(0) = 2 and dxx (0)...
-
b. A fence company is measuring a rectangular area in order to install a fence around its perimeter. If the length of the rectangular area is 130 yards and the width is 75 feet, what is the total...
-
The accompanying data represent the approximate population, in millions, of the 20 most populous cities in the world. 13.5 11.7 10.4 8.4 7.8 13.3 11.6 9.4 8.4 7.7 12.7 11.5 9.3 8.2 7.4 12.3 11.3 8.7...
Study smarter with the SolutionInn App