Risk premium associated with stock

Assignment Help Finance Basics
Reference no: EM133060973

Two stocks, A and B, have beta coefficients of 0.5 and 1.0, respectively. If the expected return on the market is 8 percent and the risk-free rate is 6 percent, what is the risk premium associated with each stock? Round your answers to two decimal places.

The risk premium for stock A: %

The risk premium for stock B: %

Reference no: EM133060973

Questions Cloud

What is the annual amount of depreciation expense : Your Company purchased equipment onJanuary1 for $95,000. What is the annual amount of depreciation expense for each of the remaining years
What is the npv of project : A division of Virginia city highlands manufacturing is considering purchasing for $1,500,000 a machine that automates the process of inserting electronic compo
Compute the weighted-average interest rate : Company Z took out a construction-specific 10%, 4-year note of $400,000. Compute the weighted-average interest rate
Looking finance that present less risk exposure : Would syndicate financing coupled with a Option contract be ideal for a company looking to finance a 5 million project, they are also looking finance that prese
Risk premium associated with stock : Two stocks, A and B, have beta coefficients of 0.5 and 1.0, respectively. If the expected return on the market is 8 percent and the risk-free rate is 6 percent,
Determine how the bond price relates : You can determine how the bond price relates to its face value just by comparing the coupon rate to the yield).
What is the current market value of this preferred stock : If you know that investors require a 17 percent pretax rate of return on this preferred stock, what is the current market value of this preferred stock
What is the implied exchange rate at maturity : A five-year, 7.5 percent Euroyen bond sells at par. A comparable risk five-year, 9.0 percent yen/dollar dual-currency bond pays $840.33 at maturity.
Find out the expected period of ownership : You are considering an option to purchase or rent a single residential property. You can rent it for $2,000 per month and the owner would be responsible for mai

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the accounting break-even point

Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

  What is the current intrinsic value of vandell stock

Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30%.

  Calculate the price of a call option on a stock

You are to calculate the price of a call option (European) on a stock that does not pay dividends when its price is $52, the exercise price is $50.

  What is the investor required return for investment

If an investor is currently willing to pay $500 each CFC share, what is the investor's required return for this investment?

  What is formula value of each warrant under given conditions

What is the formula value of each warrant under these conditions?- What happens to the rate of return from the warrant as the stock price rises? Why do you think this happens?

  Assume that you have 16500 invested in stock that is

assume that you have 16500 invested in stock that is returning 11.5085000 invested in a stock is returning 22.75 and

  What is total cost of new car of the business property

What is the total cost of the new car that will be treated as part of the business's property, plant and equipment?

  Prepare and income statement for cathy chen

Prepare and Income statement for Cathy Chen, CPA for the year ended December 31, 2015.

  Calculate roe and eps under each of the economic scenarios

a. Calculate ROE and EPS under each of the economic scenarios before any debt is issued. b. Repeat part a, assuming that the company goes through with the capi

  Calculate the value of bonds

Please calculate the Value of Bonds. Please provide a clear calculation and brief explanation:

  Identify? the type of gas in the bubbles

1. Other than type of carbohydrate, ?identify? 2 other factors you think could affect the rate of cellular respiration.

  Which of following securities has the largest present value

Which of the following securities has the largest present value? Assume in all cases that the annual interest rate is 8 percent and that there are no taxes. a. A security that pays you $1,000 at the end of 1 year, $2,000 at the end of 2 years, and..

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