What is the expected return for a stock with a beta

Assignment Help Financial Management

Reference no: EM131051224

You have just purchased a home and taken out a $420,000 mortgage. the mortgage has a 30-year term with monthly payments and an APR of 7.44%

a. how much will you pay in interest, and how much will you pay in principal, during the first year?

b. How much will you pay in interest, and how much will you pay in principal, during the 20th year (between 19 and 20 years from now)If the expected return on the market is 10 percent and the risk-free rate is 4 percent,

Part A. What is the expected return for a stock with a beta equal to 1.00? (Round answer to 2 decimal places, e.g. 0.15.)

Part B. What is the market risk premium? (Round answer to 2 decimal places, e.g. 0.15.)

Please show me the steps as clear as possible for each part

Reference no: EM131051224

Questions Cloud

Control purchasing and accounts payable : An accounting information system (AIS) must include certain source documents in order to control purchasing and accounts payable. For a manufacturing organization, the best set of documents should include:

Before converging to the industry median growth rate : The Fast-Growth Company recently paid a dividend of $3.20 per share. Analysts expect the dividend to grow at the rate of 28% per year for 3 years, then by 16% for 3 more years, before converging to the industry median growth rate of 7%. The firm’s be..

How long will take you to pay off mortgage after refinancing : The mortgage on your house is 5 years old. It required monthly payments of 1,422, had an original term of 30 years, and had an interest rate of 10% (APR –monthly). What monthly repayments will be required with the new loan? Suppose you are willing to..

Lombard frequently sells similar items : On January 1, 2014, Lombard Co. sells property for which it had paid $690,000 to Sargent Company, receiving in return Sargent's zero-interest-bearing note for $1,000,000 payable in 5 years.

What is the expected return for a stock with a beta : You have just purchased a home and taken out a $420,000 mortgage. the mortgage has a 30-year term with monthly payments and an APR of 7.44%. how much will you pay in interest, and how much will you pay in principal, during the first year? What is the..

Calamitous earthquake losses : Because of calamitous earthquake losses, Bernstein Company, one of your client's oldest and largest customers, suddenly and unexpectedly became bankrupt. Approximately 30% of your client's total sales have been made to Bernstein Company during eac..

Macroeconomic issue about the international reserves : Write the macroeconomic issue about the international reserves of Malaysia, explain this issue, how this issue happened in Malaysia, and explain the impact of this issue (good influence and bad influence), must have reference to support your answe..

Dividends are projected to increase : Diets For You announced today that it will begin paying annual dividends next year. The first dividend will be $0.12 a share. The following dividends will be $0.15, $0.20, $0.50, and $0.75 a share annually for the following 4 years, respectively. Aft..

Policies result in higher prices for consumers : Protectionist trade policies result in higher prices for consumers. One way to view the higher prices is as a transfer from workers in unprotected industries to those in the protected industry.

User Account

All Pages