Calculate the required return for freedom corporation

Assignment Help Financial Accounting
Reference no: EM132887295

The estimated factor sensitivities of Freedom Corporation to Fama-French factors and the risk premia associated with those factors are given in the following table:

                                 Factor Sensitivity                 Risk Premium (%)
Market factor                1.8                                   2.8%
Size factor                    0.4                                  1.7%
Value factor                 -0.5                                  3.4%

Problem i. Based on the Fama-French model, calculate the required return for Freedom Corporation using these estimates. Assume that the Treasury bill rate is 3 percent.

Problem ii. What do you know about Freedom Corporation based on its factor sensitivities?

Reference no: EM132887295

Questions Cloud

Prepare the journal entries relating to the share options : Prepare the journal entries relating to the share options for SHAPE Ltd for the years ended 31 December 2020, 2021 and 2022.
Question related to the samsung electronics industry : Q 1. Write the introduction to the whole paper (i.e. answers to questions 1-6). You should include the purpose, main findings, and the scope and the structure o
Arguments for prosecutor or defense attorney : Describe whether justice was served in this case. Discuss alternative arguments for the prosecutor or defense attorney
What the total R-D expenses reported : Equipment acquired for use in multiple R&D projects $1,000,000. What the total R&D expenses reported in Frye's 2019 income statement
Calculate the required return for freedom corporation : Based on the Fama-French model, calculate the required return for Freedom Corporation using these estimates. Assume that the Treasury bill rate is 3 percent.
Weaknesses of the millennial generation in the workplace : Express Employment Professionals reported in "America Employed" that Millennials-those born approximately between 1980-2000-bring exceptional technological savv
What are employment interviews best suited to assess : See the following questionsjob applicants have to be screened with a great care? explain.
What is the amount of expense recognized : Meetings of incorporators, state filing fees, and other company expenses 5,000. What is the amount of expense recognized
What is the total contribution margin for next quarter : The variable cost per case, including both manufacturing and selling costs, is $105. What is the total contribution margin for next quarter?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Provide the journal entries to account for the receipt

First Point Ltd, Provide the journal entries to account for the receipt of the application monies and the subsequent allotment of the shares.

  How many years must romeo wait to receive

How many years must Romeo wait to receive $85,000? (Hint: Use Table 3.) Romeo Cruz has been offered the opportunity of investing $49,086 now.

  Calculate the expected size of generic retirement account

Assume some amount of monthly contributions, employer matching added in, assumed average annual earnings, and the expected number of years until retirement, to calculate the expected size of a generic retirement account.

  Assess the ethical considerations for information privacy

Assess the ethical considerations for information privacy

  What ramsey share of vapor income is

On January 1, 2019, Ramsey Company purchased 35%,Ramsey accounted for the investment using the equity method. what Ramsey's share of Vapor's income for 2019 is?

  Actions from the perspective of organization-person fit

Ethic study question: Compare the role of Sherron Watins as a whistleblower in Enron case to that of Leyla Wydler in the Allen Stanford Ponzi scheme in terms of the nature of the whistle blowing and the motivation to blow the whistle. Can you charact..

  What are the major sources of cash for each firm

What are the major sources of cash for each firm? What are the major uses of cash for each firm? What was the trend in cash flow from (continuing) operations

  What profit can you lock in without any risk

What profit, to two decimal places, can you lock in without any risk if you borrow 1m in the appropriate currency

  Prepare journal entry to record the purchase of equipment

On January 1, 2011, Galaxy Sun Industries acquired a new piece of machinery and a used truck from Acme Equipment Company. Galaxy Sun negotiated a price of $125,000 for both items. The fair market value of the equipment was $120,000, and the fair mark..

  Variable costing income statement - reconciliation

Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above

  Compute the largest depreciation deduction

LB Corporation purchased a business car in June 2015 for $42,000. The car weighs 4,000 pounds and will be used 100 percent of the time in the business. Compute the largest depreciation deduction possible in 2015. No other property purchases were made..

  Calculate taxable income for 2012

Calculate taxable income for 2012 Record journal entry to record income tax expense deferred income taxes and income tax payable for 2012

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