Average real risk premium and average real risk-free rate

Assignment Help Financial Management
Reference no: EM131526905

You’ve observed the following returns on Barnett Corporation’s stock over the past five years: –28.2 percent, 15.8 percent, 34.6 percent, 3.4 percent, and 22.4 percent. The average inflation rate over this period was 3.34 percent and the average T-bill rate over the period was 4.3 percent.

1. What was the average real risk-free rate over this time period?

Average real risk-free rate__________%

2. What was the average real risk premium?

Average real risk premium__________%

Reference no: EM131526905

Questions Cloud

What is bonds yield to call : Delta Motors has bonds outstanding which will mature in 12 years. What is the bonds’ yield to call?
What is the company cost of preferred stock : The stock would pay a constant annual dividend of $3.70 per share. If the firm's marginal tax rate is 40%, what is the company's cost of preferred stock?
An equipment rental firm purchased a new scissor : An equipment rental firm purchased a new scissor lift to add to its rental fleet. determine the lowest rental rate that the company should use.
What is effective annual interest rate charged on such loan : What is the effective annual interest rate charged on such a loan, assuming loan repayment occurs over 156 months?
Average real risk premium and average real risk-free rate : What was the average real risk-free rate over this time period? What was the average real risk premium?
Describe the debt contract features : Describe the following debt contract features
Growth rate in dividends forever : Afterward, the company pledges to maintain a constant 6 percent growth rate in dividends forever.
What is the p-e ratio for your stock : What is the 52-week high and low? What is the current stock price (as of this week)? What is the P/E ratio for your stock?
Firm degree of financial leverage-affect earnings per share : If a firm's degree of financial leverage (DFL) is 3, how will a 3% increase in earnings before interest and taxes (EBIT) affect earnings per share (EPS)?

Reviews

Write a Review

Financial Management Questions & Answers

  Current spot exchange rate and interest rate data

Proctor and Gamble's affiliate in India, P&G India, procures much of its toiletries product line from a Japanese company. Because of the shortage of working capital in India, payment terms by Indian importers are typically 180 days or longer.

  Selling stock with a limit order

Selling Stock with a Limit Order You would like to sell 200 shares of Pfizer, Inc.(PFE). how much money do you receive from the buyer?

  What is the least you could pay to acquire a bill

A Treasury bill has a bid yield of 3.5% and an ask yield of 3.44%. The bill matures in 155 days. Assume a face value of $1,000. What is the least you could pay to acquire a bill?

  What was the annual change in the average selling price

In October 2012, the average house price in the United States was $221,300. In October 2004, the average price was 286,300. What was the annual change in the average selling price?

  What is the current value of the companys stock

JJ industries will pay a regular dividend of $2.40 per share for each of the next four years. At the end of the four years, the company will also pay out a $40 per share liquidating dividend, and the company will cease operations. If the discount rat..

  What is the approximate variance of returns for a security

What is the approximate variance of returns for a security if the expected returns are -4.0%, 6.0%, and 15.0%, and the probabilities of occurring are 0.40, 0.30, and 0.30, respectively? A. 470 B. 63 C. 30 D. 961

  What must the risk-free rate be

A stock has an expected return of 14 percent, a beta of 1.70, and the expected return on the market is 10 percent. What must the risk-free rate be? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

  Financial institution is planning to arrange swap

financial institution is planning to arrange a swap and requires a 50-basis-point spread

  What is the price of the combined test assuming

When the tests are combined, only one syringe, form, and sterile ban­dage will be used. Furthermore, only one charge for breakage/losseswill apply. Two blood vials are required, and reagent costs will remainthe same (reagents from all three tests ..

  Valuation methodologies

ABC, Inc., is an unlevered venture that reached its mature life-cycle stage. ABC is expecting earnings before taxes of $30 million in perpetuity. The required return of the firm’s unlevered equity (rU) is 18 percent, and the firm distributes all of i..

  Statement relevant cash flows

In a financial decision, what is meant by the statement “Relevant Cash Flows”? How do you assure cash flows are relevant?

  What is the companys stock price after three years

Aspen purchased a dot-com stock, which was heavily advertised on the Internet for $35 per share shortly after the stock's IPO. Over the next three years, the stock price declined by 17% each year. What is the company's stock price after three years?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd