What is the expected rate of return on stock with beta

Assignment Help Financial Management
Reference no: EM13928107

The risk-free rate of return is 4.2 percent and the market risk premium is 11 percent. What is the expected rate of return on a stock with a beta of 1.8?

12.00 percent

18.56 percent

19.80 percent

9.28 percent

24.00 percent

Reference no: EM13928107

Questions Cloud

Expected return on equity under each current asset level : Payne Product's sales last year were anemic $1.6 million, but with an improved product mix it expects sales growth to be 25% this year, and Payne would like to determine the effect of various current asset policies on its financial performance. What ..
Explain what is meant by the impossible trinity : (A) Please define and explain what is meant by the “Impossible Trinity,” being sure to thoroughly define the relevancy of each facet of the triangle. (B) Please define and explain how the concept of the “Impossible Trinity” applies both to the establ..
What is the one year future exchange rate : John wants to build a new building. He needs $35 million. He may borrow in the US at 4.5% or in the UK for 7.5% for 1 year. The current exchange rate is $1.5:£1.0. What is the 1 year future exchange rate?
Reimburses losses on an actual-cash value basis : Sarah Kavenna's luxurious home in Georgetown, a neighbourhood in Washington dc, was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $27,000. What is the ma..
What is the expected rate of return on stock with beta : The risk-free rate of return is 4.2 percent and the market risk premium is 11 percent. What is the expected rate of return on a stock with a beta of 1.8?
Distinguish between a tenant farmer and a sharecropper : Explain the following terms: subsistence farming, shifting cultivation, Latifundios and minifundios. How would you define ‘land Gini'? Explain why land Gini is so much higher in Latin America, compared to Asia.
About their homeowners coverage : Last year, Paul and Joanna Stillman bought a home with a dwelling replacement value of $250,000 and insured it (via an HO-5 policy) for $210,00. The policy reimburses for actual cash value and has$500 deductible standard limits for coverage C items, ..
What is the chance that the project will have a positive npv : The anticipated standard deviation of this expected NPV is $3 million, and the distribution of the project's NPV is approximately normal. What is the chance that this project will have a positive NPV at least equal to $1 million?
Case study regarding the southwest airlines : Read Case 10: Southwest Airlines.  Answer questions 1-4 in a three to five page APA style paper, and supported with the concepts outlined in your text and from your previous classes.

Reviews

Write a Review

Financial Management Questions & Answers

  Maximizing profits and minimizing losses

Create a report that includes a discussion and analysis regarding how such a supplier makes such a determination in order to maximize the firm's profits. Include in your response:

  Gap analysis and benchmarking for anthonys orchard hi sir

hi sir madam ltbrgt ltbrgtcan you please check the attached assignment and let me know about it. looking forward to

  What is current spot price of gold if lease rate on contract

What is the current spot price of gold if the lease rate on the contract is 1.5%, the risk-free rate is 6%, and the 1-year forward price is $313.81?

  Breakeven point for units sold for annual operating cycle

If the selling price were $15,000 per item, and company incurred an average direct cost of $4,000 per item, with a debt-to-asset ratio of 10%, an inventory-turnover ratio of 2, what would be the breakeven point for units sold for an annual operating ..

  Evaluating two different silicon wafer milling machines

You are evaluating two different silicon wafer milling machines. The Techron I costs $237,000, has a three-year life, and has pretax operating costs of $62,000 per year If your tax rate is 34 percent and your discount rate is 8 percent, compute the E..

  Paid dividend-what is the price of the stock

Thirsty Cactus Corp. just paid a dividend of $2.40 per share. The dividends are expected to grow at 16 percent for the next eight years and then level off to a growth rate of 6 percent indefinitely. If the required return is 15 percent, what is the p..

  What percentage of principal is paid off-mortgage balance

You purchase a house that costs $625,000 with a 8%, 30-year mortgage. In order to avoid PMI insurance, you decide to follow a conforming mortgage by making a down payment of 20%. 1. What is your monthly payment? 2. Amortize the first and second payme..

  Net present value of a project that has initial cash outflow

What is the net present value of a project that has an initial cash outflow of $12,670 and the following cash inflows? The required return is 11.5%

  What is the current price of this bond

A $1,000 face value bond currently has a yield to maturity of 4.8 percent. The bond matures in five years and pays interest semi-annually. The coupon rate is 4 percent. What is the current price of this bond?

  Standard deviation of return on your clients portfolio

You manage an equity fund with an expected risk premium of 11.2% and a standard deviation of 26%. The rate on Treasury bills is 4.2%. Your client chooses to invest $70,000 of her portfolio in your equity fund and $30,000 in a T-bill money market fund..

  Prepare an income statement for krugpark in good form

KrugPark produces a popular beverage called odes us which sells for $97 a case. Last year KrugPark sold 170,000 cases, each of which costs $50 to produce. KrugPark incurred selling and administrative expenses of $670,000 and depreciation expense of $..

  Key emerging performance management

Review current research published in recent (within the past 5 years) academic journal articles focusing on emergent performance management topics. These might include topics related to sustainability, ethics or any efforts to spark innovation in ..

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