Find expected rate of return on market-market risk premium

Assignment Help Financial Management
Reference no: EM13945288

Stock A has a beta of .8, and investors expect it to return 9%. Stock B has a beta of 1.2, and investors expect it to return 13%. Use the CAPM to find the expected rate of return on market and the market risk premium. (Do not round intermediate calculations. Round your answers to 1 decimal place.)

Please show your work

Reference no: EM13945288

Questions Cloud

What is the efficient markets hypothesis : How can rational investors reduce their risk of investing in "stand alone" stocks? How does a stock portfolio reduce the risk of investments? What is a stock's beta? What is the Efficient Markets Hypothesis?
Should pat raise this issue with management : Should Pat raise this issue with management? If so, what should he say? What if he does raise the issue and the company does nothing? What should he do then, if anything? Does this use of our technology breach a core value? Or is this a case where w..
Rapidly changing technology and business environments : Rapidly changing technology and business environments might have impacted each generation differently. Do you believe that each generation has similar needs for products or services? How do economic factors such as a recession or consumers having mor..
Strategic growth through mergers and acquisitions : In the global oil sector the pace of strategic growth through mergers and acquisitions has paused during the past decade.
Find expected rate of return on market-market risk premium : Stock A has a beta of .8, and investors expect it to return 9%. Stock B has a beta of 1.2, and investors expect it to return 13%. Use the CAPM to find the expected rate of return on market and the market risk premium.
Special radiology scanner from bella : Twilight Hospital purchased a $98,800 special radiology scanner from Bella Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life
Describe how the technology connects to the material : In other words, describe a specific space mission, project, or instrument and describe how the technology, science, or engineering connects to the material in our class. Be very specific for full credit.
Review the advantages of database management systems : Review the advantages of database management systems? Which two advantages do you think are the most important? Why?
What is the aftertax cash flow from sale of this asset : Consider an asset that costs $211,200 and is depreciated straight-line to zero over its 12-year tax life. The asset is to be used in a 5-year project; at the end of the project, the asset can be sold for $26,400. Required : If the relevant tax rate i..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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