Compute the expected return on this stock

Assignment Help Financial Management

Reference no: EM132073889

The risk premium for exposure to exchange rates is 5%, and the firm has a beta relative to exchange rates of .4. The risk premium for exposure to the consumer price index is -6%, and the firm has a beta relative to the CPI of .8.

If the risk-free rate is 3%, what is the expected return on this stock?

Reference no: EM132073889

Questions Cloud

What is the amount of his new annual payment : Robert is repaying a debt with 17 annual end-of-the-year payments of $800 each. At the end of the 4th year, he makes an extra payment of $1600.

How many must be sold each year for this to be a zero-npv : If RJR sells the same number of Premiers every year for the next twenty years, how many must be sold each year for this to be a zero-NPV project.

What is her percent total return on this investment : After one year, Robin sold the stock at a price of $19.50 share. What is her percent(%) total return on this investment?(10%)

Compute net cash provided by operating activity : Accounts receivable and accounts payable at year-end were $144,180 and $55,269, respectively. Assume that accounts payable related to operating expenses.

Compute the expected return on this stock : The risk premium for exposure to the consumer price index is -6%, and the firm has a beta relative to the CPI of .8.

What is the rate of return on this project : The Robertson Firm is considering a project which costs $123,900 to undertake. The project will yield cash flows of $4,894.35 monthly for 30 months.

Is there an opportunity for arbitration : The current exchange rate of £ 0.573 / $ 1 and the forward price (F0) of £ / $ for one Maturity of 3 months is £ 0.575 / $ 1.

What risks do you think might be unique to accepting : What risks do you think might be unique to accepting and retaining clients in foreign country that is not necessarily supportive of U.S. interest?

What is the risk premium for litchfield design stock : The expected return on the market is 15.84 percent, the risk-free rate is 3.8 percent, and inflation is 1.07 percent?

User Account

All Pages