Estimate that the market risk premium

Assignment Help Financial Management

Reference no: EM131334042

You estimate that the market risk premium is 8%, the size premium is 2%, the book-to-market premium is 2%, and the risk free rate is 1%. All of these expected returns are APR rates compounded annually. You believe that American Express has a market beta of 1.25, a size beta of 0.5, and a book-to-market beta of 0.5. Based on the Fama and French (1993) 3 factor model, what is this stock's expected return? Your answer should be entered as a percent and if necessary rounded to the nearest percent.

Reference no: EM131334042

Questions Cloud

Analysis of current health care records : Write a paper comparing and contrasting the collection of secondary data and their uses versus the analysis of current health care records and internal data such as incident reports and patient surveys

Planned capital budget for the upcoming year : You know the following about the firm: Their planned capital budget for the upcoming year is $100.5 million. Their forecasted net income is $150.0 million. Calculate, based on the existing capital structure of 87.5 percent equity, how much equity and..

Respiratory-digestive-urinary and reproductive systems : Focusing on the respiratory, digestive, urinary, and reproductive systems. Create a scenario and give your patient a disease associated with any of these systems and present the history and symptoms of the particular disease below the question. Be..

Intercellular diffusion of sodium : How do gap junctions function with the intercellular diffusion of sodium

Estimate that the market risk premium : You estimate that the market risk premium is 8%, the size premium is 2%, the book-to-market premium is 2%, and the risk free rate is 1%. All of these expected returns are APR rates compounded annually. You believe that American Express has a market b..

Socioeconomic status and disease management : Explain the influence of lifestyles, socioeconomic status, and disease management regarding the flu.

Provide an introduction to your policy-priority issue : Provide an introduction to your policy-priority issue. Articulate key points under each of the Formulating a Health Care Policy Ungraded Worksheet #1 sections, using the headings in your paper

Resource partitioning led to character displacement : Explain how resource partitioning led to character displacement in the interactions between the benthic and limnetic sticklebacks in Paxton Lake.

What is degree of combined leverage at both sales levels : Healty Foods Inc sells 50 lb bags of grapes to the military fo $10 a bag. The fixed costs of this operation are $80,000 while the variable costs of grapes are $.10 per lb. What is the break-even point in bags? Calculate the profit or loss on 12, 000 ..

User Account

All Pages