Market expected return-risk-free rate

Assignment Help Financial Management
Reference no: EM131349333

A stock has an expected return of 11 percent, its beta is .85, and the risk-free rate is 5.5 percent. What must the expected return on the market be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Market expected return=

Reference no: EM131349333

Questions Cloud

Mobile workforce instead of a traditional office work force : What are some arguments used in favor of using a mobile workforce instead of a traditional office work force?
Discuss about the nursing leadership and management : NRS-451V: Based on the scientific management theory, what are some of the routines in health care that seem to be inefficient? What examples of participative decision making exist in your workplace? Provide your rationale.
Case study-organizational research and theory : Based on the article, consider the approaches to organizational design. Analyze the effects and applications of the various organizational structures and levels of authority. Given the benefits and motivations mentioned in the article, share an an..
Determine the exit pressure of the gas mixture : Through a preheating process in the nozzle, the gas mixture receives 1325.5 kJ per kg of mixture of heat at 500.°C. Determine the exit pressure of the gas mixture. Assume ideal gas behavior.
Market expected return-risk-free rate : A stock has an expected return of 11 percent, its beta is .85, and the risk-free rate is 5.5 percent. What must the expected return on the market be?
Determine the work required to isentropically compress : Determine the work required to isentropically compress 2.70 lbm of the mixture from 14.7 psia, 70.0°F to 50.0 psia.
Explain sampling technique discussed in the visual learner : HLT-362V : Explain each sampling technique discussed in the Visual Learner: Statistics in your own words, and give examples of when each technique would be appropriate.
Elements of observable culture : Using the organization of supermarkets/ grocery stores , identify its core culture and the elements of its observable culture. What do you think needs to be changed to align your culture to the elements in the environment?
General and specific environments : For the organization of supermarkets/grocery stores , identify the factors that operate in its general and specific environments. Why is it important for managers to understand the factors that affect their organization?

Reviews

Write a Review

Financial Management Questions & Answers

  After-flotation cost of the firms preferred stock

Suppose that a firm has preferred stock that currently trades for $123.45 per share, pays an annual dividend of $6.7, that the dividends do not grow over time, and has a flotation cost of 8.9%. What is the annual, after-flotation cost of the firm's p..

  From the books of agarwal from books of aggarwal bors

from books of aggarwal bors following information has been extracted rs. sales 240000 variable costs 144000 fixed costs

  What is the amount of the firms net working capital

Scare Train, Inc. has the following balance sheet statement items: current liabilities of $780,940; net fixed and other assets of $1,537,030; total assets of $3,424,010; and long term debt of $676,468. What is the amount of the firms’ net working cap..

  Two loans generate approximately the same income

Assume that a customer borrows $230,000 for one year from your bank. As a loan officer, you offer the customer the loan if they agree to pay $19,500 in interest, plus agree to pay the $230,000 back at the end of one year. What is the APR? At what dis..

  What is the operating cash flow for first year of project

The Sports Club wants to expand its facility. The expansion will require $350,000 in building improvements that will be depreciated on a straight-line basis over a 10-year period. The expanded area is expected to generate $250,000 in additional sales..

  State of probability of economy state of economy stock

Rate of Return If State Occurs State of Probability of Economy State of Economy Stock I Stock II Recession .20 .04 −.35 Normal .60 .26 .15 Irrational exuberance .20 .10 .55 The market risk premium is 5 percent, and the risk-free rate is 4 percent.

  Bonds price changes as interest rates change

If two bonds have the same duration, the change in their price when interest rates change will be the same. For non-callable bonds, duration provides only a linear approximation of a bond's price changes as interest rates change.

  Pay interfirst according to the standard fra formula

Suppose that KF Exports enters into an FRA with Interfirst Bank with a notional principal of $40 million and the following terms: In six months, if LIBOR is above 6% then KF will pay Interfirst according to the standard FRA formula; KF OR Interfirst ..

  What risks did it pose to the financial system

What is leverage? What information from this excerpt indicates that Long-Term Capital Management was highly leveraged?

  Short-term profits at the expense of long term profits

Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long term profits.

  Future dividends are expected to grow at constant rate

Acme Inc. just paid a dividend of $5 per share. Future dividends are expected to grow at a constant rate of 7% per year. What is the value of the stock if the required return is 16%?

  What is its sustainable rate of growth

Stop and Shop Supermarkets has a 4.5% profit margin and a 15% dividend payout ratio. The total asset turnover is 1.6 and its debt-equity ratio is 0.5. What is its sustainable rate of growth?

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