Retained earnings based on the CAPM approach

Assignment Help Financial Management

Reference no: EM131986787

1. Assume that you are a consultant to Magee Inc. and you have been provided with the following data: rRF = 4.00%; RPm = 5.00%; and b= 1.15. What is the cost of equity from retained earnings based on the CAPM approach?

a. 9.75%

b. 10.04%

c. 10.34%

d. 10.65%

e. 10.97%

2. J. Harper Inc.'s stock has a 50% chance of producing a 35% return a 30% chance of producing a 10% return and a 20% chance of producing a 28% return. What is Harper's expected return?

a. 14.16%

b. 14.53%

c. 14.90%

d. 15.27%

e. 15.65%

Reference no: EM131986787

Questions Cloud

Using the suggested maximum debt safety ratio : Using the suggested maximum debt safety ratio, what maximum debt burden per month can he assume?

What must be the variable cost per unit : How many years will it take you to pay off a loan of $18390. What must be the variable cost per unit?

What is monthly payment on mortgage loan : What is your monthly payment on a mortgage loan of $65600 for 5years if the bank charges 5% annually compounded monthly?

What level of expected cash flows : Allied Products, Inc., is considering a new product launch. what level of expected cash flows does it make sense to abandon the project?

Retained earnings based on the CAPM approach : What is the cost of equity from retained earnings based on the CAPM approach?

Deposit into bank account monthly : How much should you deposit into a bank account monthly in order to buy a property that you expect to cost $343100 in 25 years i

Fintech disruptions affecting the financial industry : Explain the actions the financial industry can take to reduce the impact of FINTECH disruptions affecting the financial industry.

Difference in effective annual rates charged by two banks : What is the difference in the effective annual rates (EAR) charged by the two banks?

What is the amount of the february cash collections : ABC collects 74 percent of its sales in the month of sale and the remainder is collected in the month. What is the amount of the February cash collections.

User Account

All Pages