Question: Emery Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the risk-free rate of return is

Emery Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the risk-free rate of return is 4.2%, the expected return on the market portfolio is ?

Step by Step Solution

★★★★★

3.39 Rating (143 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

As per CAPM Model the formula is as under Required rate ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021: Required: 1. Determine Lakesides pension expense for 2021, and prepare the...

The spreadsheet below has annual returns for three mutual fundsCapital Appreciation, High Return and Total Returnfor 10 years. A market return and a risk-free rate are provided, along with the beta...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

Why is there a cost associated with retained earnings? b. What is Aces cost of retained earnings, based on the CAPM approach and the analysts long run forecast rate of growth? c. Why might one...

Emery Inc. has a beta equal to 1.8 and a required rate of 15% based on the CAPM. If the risk-free rate of return is 4.2%, the expected return on the market portfolio is: SHow work.

Need the answer to these 9 finance questions. Document is attached below. 1. Manny and Irene will be retiring in fifteen years and would like to buy a Mexican villa. The villa costs $500,000 today,...

C Question 3 Avalanche Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the risk-free rate of return is 4.2%, the required return on the market portfolio is: 10.2%...

Surf and Spray Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the market risk premium is 7.5%, the risk-free rate of return is? I got the formula worked out to 15 % =...

Surf and Spray Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the market risk premium is 7.5%, the risk-free rate of return is Select one: a. 3.4%. b. 1.5%. c. 4.1%....

Surf and Spray Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the market risk premium is 7.5%, the risk-free rate of return is

LOLIUS Macros 5 points QUESTION 4 1. Stock A has the following returns for various states of the economy State of the Economy Recession Below Average Average Above Average Boom Probability Stock A's...

Effect of salary, training and motivation on job performance of employees 1. Introduction and Background Salary can be defined as a fixed amount of money paid to a worker usually measured at monthly...

What makes POS systems different from revenue cycles of manufacturing firms?

The following ratios using the numbers $30,578 sales $2368 net income $61,173 assets $30,722 total equity For help with the calculations. Net Profit Margin (NI / Sales) Total Asset Turnover (Sales /...

According to a recent Gallup poll, 62% of Americans took a vacation away from home in 2017. Suppose two Americans are randomly selected. a. What is the probability that both took a vacation away from...

A college newspaper interviews a psychologist about student ratings of the teaching of faculty members. The psychologist says, The evidence indicates that the correlation between the research...

A student flips a coin 10 times and sees that it landed on tails 4 times. Based on this, the student says that the probability of getting a tail is 40%. Is the student referring to an empirical...

You are creating an application that will feed into a Tourism business database for location of interesting sites in the country (Ghana.) Your application is a simple command-line interface that will...

Sample values from an experiment often need to be smoothed out. One simple approach is to replace each value in an array with the average of the value and its two neighboring values (or one...

Which type of human capital supply do organizations often give preference to?a internalb externalc contingentd international

If an investor can determine when the bottoming out of the economy will occur, when should stocks be purchasedbefore, during, or after such a bottom? Would stock prices be expected to continue to...

Is the study of investments really important to most individuals?

A mutual fund has the following returns for three consecutive years: 8%, 3.5%, and 16%. a. What is the cumulative wealth per $1 invested? b. What is the geometric mean return for this three-year...

Identify some common visual illusions and the factors that influence our perception of them.

After being in class for a while, _________ is a likely explanation for not hearing the sound of the lights buzzing above you until someone says something about it. a. habituation b. accommodation c....

Explain how the sense of smell works.