ABC Corporation: Expected Return = 10.18%, Beta = 1.06 XYZ Corporation: Expected Return = 12.69%, Beta =

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

Question:

ABC Corporation: Expected Return = 10.18%, Beta = 1.06

XYZ Corporation: Expected Return = 12.69%, Beta = 1.41

Assume that both assets are priced correctly according to CAPM.

Calculate the following:

Risk-free Rate = %

Market Risk Premium = %

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0324659139

11th edition

Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones

See More Books

Posted Date: Feb 15, 2023 01:53 AM

See More Questions

Assume that the following assets are correctly priced according to the security market line. Derive the security market line. What is the expected return on an asset with a beta of 2? R, = 6% R2 =...
Assume a risk free rate is 4%, an asset return estimate of 10% and the value of standard deviation of estimated return of 12%. What is the slope of the assets CML (Capital Market Line)?
ABC corporation and XYZ corporation exchange business property. ABC receives business property worth $60,000 and $5,000 cash. ABC gives up business property worth $65,000 and adjusted tax basis of...
A machine was sold in December 20x3 for $13,000. It was purchased in January 20x1 for $19,000, and depreciation of $16,000 was recorded from the date of purchase through the date of disposal....
Gems International, Ltd., is a foreign firm that has a 12 percent share of the U.S. market for diamonds. To capture a larger share, Gems offers its products at a below-cost discount to U.S. buyers...
A project that provides annual cash flows of $15,300 for nine years costs $74,000 today. a. At a required return of 8 percent, what is the NPV of the project? Note: Do not round intermediate...
The common methods for the computational solution of radiative transport equations are summarized briefly below: 1. The discrete ordinate method 2. The Monte-Carlo method 3. Hottel's zonal method 4....
Estimate Walmarts weighted average cost of capital (WACC). State any assumptions and your methodology in a clear and concise manner. EXHIBIT 2: WALMART INC., CONSOLIDATED BALANCE SHEET AS OF JANUARY...
In Sunland Company, the predetermined overhead rate is 80% of direct labor cost. During the month, $218000 of factory labor costs are incurred, of which $190000 is direct labor and $28000 is indirect...
Find horizontal and Vertical components of zipline, Enter your answer in terms of T, theta_ R for Right theta angle; theta_ L for Left theta angle, v_x, v_y, c, m and g. Modeling the rider as a point...
Choose one (1) character from any film, and you will spend two to three pages doing an an in depth analysis of how that character is portrayed, what s/he says and does, how they behave, etc. Any...
An automobile is priced at $$7$,000. A buyer may purchase the car for $$6$,500 now, or alternatively, the buyer can make a down payment of $$1$,000 now and pay the remaining $$6$,000 in eight...
For your twenty-first birthday, your grandfather offers you a gift of $$1$,000 today. However, you have the choice of waiting 3 years and receiving $$1$,500 or waiting 5 years and receiving...
You purchase a $$10$,000 bond with a bond rate of 6 percent per year payable semiannually for 2 years. You pay $$9$,600 for the bond. Which statement is correct? a. Semiannual cash flows will be...
Based on the composition of each countrys currency portfolio, which country is most vulnerable to a potential crisis? A. Country A B. Country B C. Country C Judith Bader is a senior analyst for a...
If you invest $$1$,500 today and withdraw $$2$,500 in 3 years, what interest rate was earned?
Let A = {m, 4, 2, 13}, B = {1, 2, 4, 13, -2} and C = {1,3,5,7,9} a. Find AUB. b. Find ANC. c. Find (AUC)NB.
Compare and contrast debt financing and equity financing as ways of starting a new business. Does one have an overall advantage over the other? What situation is more favorable to the use of debt...
On January 1 (the authorization date) of the current year, GoldenEye Company issues $500,000 of 9% bonds at 103. These bonds pay interest on June 30 and December 31. Prepare the journal entry to...
On April 1, 2010, Ranee Company borrowed $20,000 from its bank by issuing a 9%, 12-month note, with the interest to be paid on the maturity date. Prepare journal entries to record the issuance of the...
Heller Company began operations in Year 1 and used the LIFO method to compute its $300,000 cost of goods sold for that year. At the beginning of Year 2, Heller changed to the FIFO method. Heller...
The following are summaries of the cash book and bank accounts of P. Maclaran who does not keep her books using the double entry system. You are required to: (a) Calculate the value of P. Maclaran's...
Jean Smith, who retails wooden ornaments, has been so busy since she commenced business on 1 April 2015 that she has neglected to keep adequate accounting records. Jean's opening capital consisted of...
The following trial balance of the Grampian Golf Club was extracted from the books as on 31 December 2016: (1) Bar purchases and sales were on a cash basis. Bar inventory at 31 December 2016 was...

ABC Corporation: Expected Return = 10.18%, Beta = 1.06 XYZ Corporation: Expected Return = 12.69%, Beta =

Question:

Expert Answer:

ABC Corporation Expected Return 1018 Beta 106 XYZ Corporation Expected Return 1269 Beta 141 Assume t... View the full answer

Intermediate Accounting

Students also viewed these finance questions