Company F has a beta of 0.5. The risk free rate is 4% and the expected return

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

Question:

Company F has a beta of 0.5. The risk free rate is 4% and the expected return on the market portfolio is 10%. What should be the expected return on Company F, if the CAPM is the correct model to use?

Please write your answer in percentage terms to one decimal place (7.2 percent is 7.2, not 0.072).

Related Book For answer-question

Fundamentals of Investments, Valuation and Management

ISBN: 978-1259720697

8th edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

See More Books

Posted Date: May 22, 2023 03:02 AM

See More 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...
1. Security A has expected return of 17.6% and beta of 1.4. If the risk-free rate is 6%, what is the reward-to-risk rate for Security A? Question 2 The common stock of Detroit Engines has a beta of...
Using CAPM: A stock has a of 1.2. The equity risk premium is 6 percent and the risk free rate is 2 percent. What is the rate of return required by investors in the stock? Question 2 4.1.b - using...
Baxter Ltd requires a new machine to use in the manufacture of a new product. Two machines are available: Big Gee and Maxi-Shadbolt. Baxter Ltd. depreciates machinery using the straight-line method....
(a) Which of the vectors in Problem 1.15 can be expressed as the gradient of a scalar? Find a scalar function that does the job. (b) Which can be expressed as the curl of a vector? Find such a vector.
All the patients who present to the emergency services department with a suspected acute myocardial infarction (AMI) are expected to receive an electrocardiogram (ECG) within 10 minutes of their...
El Conquistador, Inc., finances operations with both bonds and stock. Suppose El Conquistador issued $\$ 500,000$ of 10 -year, $8 \%$ bonds payable under various market conditions. Match each...
As the HR manager, you have heard rumors about potential efforts to unionize your warehouse employees. Use the www.genelevine .com website to develop a set of guidelines for supervisors if they are...
Molly is single and operates an athletic training business where she specializes in working with basketball and volleyball players. Her business operates on the calendar year and uses the cash method...
The Silver Star Bicycle Company will be manufacturing mens and womens models of its Easy-Pedal 10-speed bicycle during the next two months, and the company would like a production schedule indicating...
1. When an exception is generated, it is said to have been a. built b. thrown c. caught d. killed 2. This is a section of code that gracefully responds to exceptions. a. exception generator b....
What issues and concerns have arisen relating to Medicare Part D? How can they be resolved?
Which types of rewards are more important: intrinsic or extrinsic?
How does CHIP add to coverage provided under the Medicaid Program?
Explain why interpersonal skills are important in health care management.
What public policies might help to address health inequities or the social determinants of health?
Indexes used in databases can speed up searches for information, but if they are not carefully created, they can have a negative impact on database performance. Research all of the following online,...
Orange juice producers are dismayed and puzzled. An economist told them that the reason the demand for orange juice fell is that a new technology allow tomato producers to pick ripe tomatoes more...
To hedge the foreign exchange risk relative to the Canadian dollar, Jackson should: a. Buy a futures contract to exchange $7,083,333 for C$8.5 million. b. Buy a futures contract to exchange...
A Treasury bond that settles on August 10, 2016, matures on April 15, 2021. The coupon rate is 4.5 percent and the quoted price is 106:17. What is the bonds yield to maturity?
Use the data below to construct the advance/decline line and Arms ratio for the market. Volume is in thousands of shares. Declining Stocks Advancing Volume Stocks Declining Advancing Volume 2,530...
The transistor parameters for the circuit in Figure P12.42 are: $h_{F E}=50$, $V_{B E}(\mathrm{on})=0.7 \mathrm{~V}$, and $V_{A}=\infty$. Using nodal analysis, determine the closedloop...
The parameters of the basic source-follower circuit in Figure P12.41 are $R_{S}=1.5 \mathrm{k} \Omega, V_{T N}=1.2 \mathrm{~V}$, and $\lambda=0$. Assume the transistor is biased at \(I_{D Q}=1.2...
The parameters of the BiCMOS circuit in Figure P12.40 are $V^{+}=5 \mathrm{~V}$, $V_{G G}=2.5 \mathrm{~V}, R_{D 1}=5 \mathrm{k} \Omega, R_{E 2}=1.6 \mathrm{k} \Omega$, and \(R_{L}=1.2 \mathrm{k}...

Company F has a beta of 0.5. The risk free rate is 4% and the expected return

Question:

Expert Answer:

According to the Capital Asset Pricing Model CAPM the ... View the full answer

Fundamentals of Investments, Valuation and Management

Students also viewed these finance questions