Expected return-market risk premium-reward-to-risk ratios

Assignment Help Financial Management

Reference no: EM13939627

Stock Y has a beta of 1.4 and an expected return of 15.1 percent. Stock Z has a beta of .7 and an expected return of 8.6 percent. If the risk-free rate is 5 percent and the market risk premium is 6.5 percent, the reward-to-risk ratios for stocks Y and Z are and percent, respectively. Since the SML reward-to-risk is percent, Stock Y is and Stock Z is.

Reference no: EM13939627

Questions Cloud

The aftertax cost of debt : Jiminy's Cricket Farm issued a 30-year, 7.2 percent semiannual bond 7 years ago. The bond currently sells for 91.5 percent of its face value. The book value of this debt issue is $95 million. In addition, the company has a second debt issue, a zero c..

Aspects of the health care systems : Compare and contrast the approaches of China and UK in respect of one of the following aspects of their health care systems. Governance, funding , workforce , integration.

Writing a program in c that meets the following criteria : Include comments within the code to explain each of the functional areas.

What are the weights in equity and debt : The total market value of General Motors (GM) is $10 billion. GM has a market value of $7 billion of equity and a face value of $10 billion of debt. What are the weights in equity and debt that are used for calculating the WACC?

Expected return-market risk premium-reward-to-risk ratios : Stock Y has a beta of 1.4 and an expected return of 15.1 percent. Stock Z has a beta of .7 and an expected return of 8.6 percent. If the risk-free rate is 5 percent and the market risk premium is 6.5 percent, the reward-to-risk ratios for stocks Y an..

Describe the strategic planning process : Briefly describe the strategic planning process and how you would use this to promote the aims and outcomes of the program.

Problem regarding the center-line vaporization : A string of negligible diameter is drawn down the center-line of a pipe containing a Newtonian fluid. At what velocity, w, must the string be drawn in order to vaporize the fluid? Pose the problem in a general fashion but make whatever reasonable ..

How would it affect urine ph and why would this change occur : While visiting your family, you come down with a severe case of stomach flu. You begin vomiting and continue vomiting for more than a day, unable to keep any food or fluids down. How would you expect your condition to affect your blood pH and why ..

Function that returns the maximum value of the array : Arrays are collections of elements of the same type. The elements of the array can be accessed using their position (index) in the array.

User Account

All Pages