What is required rate of return on stock with a beta

Assignment Help Financial Management
Reference no: EM131351350

Required rate of return

Assume that the risk-free rate is 4.5% and the expected return on the market is 13%. What is the required rate of return on a stock with a beta of 2.4? Round your answer to two decimal places.

%

Reference no: EM131351350

Questions Cloud

What is expected return for overall stock market : Assume that the risk-free rate is 6.5% and the market risk premium is 8%. What is the expected return for the overall stock market? What is the required rate of return on a stock with a beta of 1?
Large maker of sportswear in the united states : Specific PerformanceLiz Claiborne, Inc. (Claiborne), is a large maker of sportswear in the United States and a wellknown name in fashion, with sales of over $1 billion per year.
Pr team in compiling a company annual report : What is the role of the PR team in compiling a company's annual report? How important is it to include PR representation in compiling these reports?
Identify at least two possible reasons : The results showed that there was no relationship between age and comprehension scores; all age groups had equally low comprehension scores. Why do you think no relationship was found? Identify at least two possible reasons.
What is required rate of return on stock with a beta : Assume that the risk-free rate is 4.5% and the expected return on the market is 13%. What is the required rate of return on a stock with a beta of 2.4?
Do you believe that software manufacturer has responsibility : The topic for this discussion is "do you believe that software manufacturers should have any responsibility for the security of their products?"
Creating and implementing pr strategies : What role does cultural sensitivity play in creating and implementing PR strategies that span across international borders? How might a lack of cultural sensitivity affect a PR firm's ability to successfully build relationships across cultures?
What is portfolio beta : An individual has $20,000 invested in a stock with a beta of 0.8 and another $50,000 invested in a stock with a beta of 2.2. If these are the only two investments in her portfolio, what is her portfolio's beta?
How fast is the airplane flying : An airplane flying at an altitude of 9000 meters passes directly overhead. Fifteen seconds later, the angle of elevation to the plane is 60°. How fast is the airplane flying?

Reviews

Write a Review

Financial Management Questions & Answers

  Determine the maximum required rate of return

A firm can purchase an asset for a $13,000 initial investment. The asset generates an annual after-tax cash inflow of $3,000 for 5 years. Show the work using the formula: NPV = CF(PVIFAr,t) - CFo. Determine the maximum required rate of return (closes..

  What is the present value of all the shops future profits

Last year, a barber shop generated $100,000 in profit. Assume that the shop's profits grow at 5% per year and that cash flows are discounted at 10% per year. If profits are received at the end of each year, what is the present value of all the shop's..

  What is most you should pay for it today

Your broker offers to sell you some shares of Bahnsen & Co common stock that paid a dividend of $2 yesterday. You expect the dividend to grow at the rate of 5% per year for the next 3 years, and if you buy the stock, you plan to hold it for 3 years a..

  Calculate the npv of total cash outflow on after-tax basis

A company could sell $125 million in bonds to finance an aquisition. The annual interest rate would be 6.5% and they would mature in 15 years. Annual principal repayments of $6.25 million would be required, leaving $37.5 million outstanding at maturi..

  The covariance of the returns between willow stock

The covariance of the returns between willow stock and sky diamond stock is 0.0900. The variance of willow is 0.2350, and the variance of sky diamond is 0.1180. What is the correlation coefficient between the returns of the two stocks?

  What are the basic arguments for increasing capital

What are the basic arguments for increasing capital requirements at large commercial banks? In what ways will depositors, stockholders, and society in general benefit? How might each group be disadvantaged? As commercial banks enter new lines of busi..

  Find the present value of all purchase-associated cash flow

You are considering whether to buy or rent a residence. You think you'll probably move in the next 8 years, so that's your time horizon for this decision. If you buy, the place costs $100K. You have to pay 20K as a downpayment, and take out a mortgag..

  The risk-free rate and market risk premium

Stock Y has a beta of 1.3 and an expected return of 15 percent. Stock Z has a beta of 0.75 and an expected return of 11.4 percent. Required: If the risk-free rate is 5.25 percent and the market risk premium is 7.75 percent, are these stocks correctly..

  Analyze the current financial state of anthonys orchard

Review the readings and media for this unit, including the Anthony's Orchard case study media - Familiarize yourself with the Anthony's Orchard company and its current situation

  What is the effective interest cost of the loan

Set up the amortization schedule for a 5-year, $1 million, 9 percent bullet loan. How is the principal repaid in this type of loan? What is the effective interest cost of this loan?

  How many passengers per day does the company

Initially, the bus company charged $1.50 per trip had a ridership of 3,000 passengers per day. The price elasticity after a $0.50 increase in fare is. -0.5 How many passengers per day does the company have after the fare increase.

  Government and their extensive use of debt to finance growth

“Fannie Mae” (FNMA) and “Freddy Mac” (FHLMC) are Government Sponsored Enterprises (GSEs) and as such were perceived to have low risk.   In the early 2000s. Former Federal Reserve Chairman Alan Greenspan stated that these institutions (“Fannie and Fre..

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