In estimating the future equity risk premium

Assignment Help Financial Management

Reference no: EM13985608

In estimating the future equity risk premium, it is important to include assumptions about: A. the historical distribution of returns on derivative securities. B. the future risk environment. C. the amount of risk aversion of future investors. D. the historical distribution of returns on derivative securities and the future risk environment. E. the future risk environment and the amount of risk aversion of future investors.

Reference no: EM13985608

Questions Cloud

What is your total dollar return on this investment : Six months ago, you purchased 1,200 shares of ABC stock for $21.20 a share. You have received dividend payments equal to $.60 a share. Today, you sold all of your shares for $22.20 a share. What is your total dollar return on this investment?

What are the arithmetic and geometric average returns : What are the arithmetic and geometric average returns for a stock with annual returns of 4%, 9%, -6%, and 18%? A. 5.89%; 6.25% B. 6.25%; 5.89% C. 6.25%; 8.33% D. 8.3%; 5.89% E. 8.3%; 6.25%

Some additional land and build a new assisted living center : Meadow Brook Manor would like to buy some additional land and build a new assisted living center. The anticipated total cost is $23.6 million. The CEO of the firm is quite conservative and will only do this when the company has sufficient funds to pa..

What happens to the bonds yield maturity of bond matures : A bond market price is $ 950. It has a $ 1000 Par value, will mature in 6 years, and has a coupon interest rate f 8 percent annual interest, but makes its interest payment semiannually. What is the bond's yield to maturity? What happens to the bond's..

In estimating the future equity risk premium : In estimating the future equity risk premium, it is important to include assumptions about:

What is the required rate of return on a preferred stock : What is the required rate of return on a preferred stock with a $50 par value, a stated annual dividend of 7 % of par, and a current market price of a.) $30, b.) $40 c.) $50 d.) $70 assumes the market is in equilbrium with the required return equal t..

Save money to meet three objectives : Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $25,000 per month for 25 years, with the first payment received 30 years and 1 month from now. If he can..

How big will the balloon payment be : You have just arranged for a $1,540,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 5.4 percent, and it calls for monthly payments over the next 22 years. However, the loan has an eight-year balloon payment, ..

Long-term government bonds-small company stocks respectively : The total annual returns on large company common stocks averaged 12.3% from 1926 to 2011, small company stocks averaged 17.4%, long-term government bonds averaged 5.8%, while Treasury Bills averaged 3.8%. What was the average risk premium earned by l..

User Account

All Pages