Calculate the required rate of return for mudd enterprises

Assignment Help Managerial Accounting
Reference no: EM133117163

Question - Suppose you are the money manager of a $4.96 million investment fund. The fund consists of four stocks with the following investments and betas:

Stock

Investment

Beta

A

$580,000

1.50

B

500,000

(0.50

C

1,480,000

1.25

D

2,400,000

0.75

If the market's required rate of return is 11% and the risk-free rate is 6%, what is the fund's required rate of return?

Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.5% rate of inflation in the future. The real risk-free rate is 1.0%, and the market risk premium is 6.5%. Mudd has a beta of 1.4, and its realized rate of return has averaged 11.5% over the past 5 years.

Reference no: EM133117163

Questions Cloud

What is the ethical issue : A partner at a major CPA firm once confided that "it's simple...we like to hire pretty women. What is the ethical issue
Define the three cost recovery deductions : Question - Define the three cost recovery deductions for tangible personal property available to a taxpayer
How much more could she have earned over a six-year period : Beatrice invests $1,460 in an account that pays 5 percent simple interest. How much more could she have earned over a 6-year period
Presentation Activity Networking and Cyber Security : Presentation Activity Networking and Cyber Security - Difference between a switch and a router and Describe the OSI model and why it is important
Calculate the required rate of return for mudd enterprises : Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.5% rate of inflation in the future
Accumulate cash to fund future projects : Q1. If the personal tax rate on stock dividends and the personal tax rate on bonds are the same, then $1000 in pretax earnings will give:
What is the required rate of return for a stock : 1. The rate of return on the U.S. government treasury bill is 0.05 and the expected rate of return on the Wilshire 5000 is 0.07. What is the required rate of re
Prepare the appropriate consolidation adjustment : At 1 July 2014, Stryker Ltd's net assets were considered to be fairly valued, except for plant (with a cost of $245 000 and accumulated depreciation $44 00
What would your portfolio new beta be : Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. What would your portfolio's new beta be

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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