Risky asset over that required from risk-free asset

Assignment Help Financial Management

Reference no: EM131057669

Which of the following statements is false? a. The risk premium is the excess return required from a risky asset over that required from a risk-free asset. b. The lower the average return, the greater the risk premium. c. Based on historical returns, there are rewards for bearing risk. d. In general, the higher the risk, the higher the expected return.

Reference no: EM131057669

Questions Cloud

Most recent dividend per share paid on the stock : Secolo Corporation stock currently sells for $81 per share. The market requires a return of 11.1 percent on the firm’s stock. If the company maintains a constant 3 percent growth rate in dividends, what was the most recent dividend per share paid on ..

Evaluating risk and return : Stock X has a 10.5% expected return, a beta coefficient of 1.0, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 30.0% standard deviation. Calculate each stock's coefficient of va..

Preferred shareholders are granted : Preferred shareholders are granted:

Efficient diversification is build portfolio of securities : The key to efficient diversification is to build a portfolio of securities that are:

Risky asset over that required from risk-free asset : The risk premium is the excess return required from a risky asset over that required from a risk-free asset. The lower the average return, the greater the risk premium. Based on historical returns, there are rewards for bearing risk. In general, the ..

Comparisons between debt and equity : Which one of the following comparisons between debt and equity is correct?

Dividends are expected to grow : Dividends are expected to grow at a 25% rate for the next three years, with the growth rate falling off to a constant 7% thereafter. If the required return is 13% and the company just paid a $2.80 dividend, what is the current share price?

Issue of preferred stock outstanding : Moraine, Inc., has an issue of preferred stock outstanding that pays a $4.95 dividend every year in perpetuity. If this issue currently sells for $94 per share, what is the required return?

Divided between capital gains yield and dividend yield : Suppose you know that a company’s stock currently sells for $66 per share and the required return on the stock is 11 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. what ..

User Account

All Pages