What is the expected return to the market

Assignment Help Finance Basics
Reference no: EM132077457

A firm has a required return of 14.2% and a beta of 1.63. If the risk-free rate is currently 5.4%, what is the expected return to the market? Assume that CAPM is correct.

5.40%

1.07%

8.80%

11.87%

10.80%

Reference no: EM132077457

Questions Cloud

Why are ratios and trends used in financial analysis : Financial Statement Analysis Questions - Why are ratios and trends used in financial analysis? What do the terms liquidity and solvency mean
What is the conversion value of the bond : A $100 par convertible debenture has a conversion price for common stock of $28 per share. With the common stock selling at $37.
Determine the level of operating income : Determine the level of operating income at which Sand Key would be indifferent between debt financing and equity financing.
Predict what the company might do to improve its ability : With the same two (2) forces in mind, predict what the company might do to improve its ability to address these forces in the near future.
What is the expected return to the market : A firm has a required return of 14.2% and a beta of 1.63. If the risk-free rate is currently 5.4%, what is the expected return to the market?
Change is adaptive change in the business atmosphere : When Incorporating adaptive change theory, describe how this change is an adaptive change in the business atmosphere.
Prepare general journal entry to record depreciation expense : Kathleen Cole Inc. acquired the following assets in January of 2012. Prepare the general journal entry to record depreciation expense for the equipment in 2015
Prepare a post-closing trial balance : Prepare a Post-Closing Trial Balance using the balances from the general ledger accounts. Use the blank form that was provided in step six
Calculate the expected price in 4 years : Calculate the expected price in 4 years. You expect the risk free rate to decrease to 3% and the market risk premium to increase to 10% in 4 years.

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute index-number trend percents for the following

compute index-number trend percents for the following accounts using year 1 as the base year. state whether the

  Which of the following will result from a stock repurchase

Which of the following will result from a stock repurchase? a. Earnings per share will rise. b. Number of shares will increase. c. Corporate cash is conserved. d. Ownership is diluted

  What factors led to the budgetary dissensus

What factors led (in Wildavsky's terms) to the Budgetary Dissensus that occurred in the 1980s? How successful was the 1985 GRH Act in achieving its goals? Why?

  Determine bc ratio for a project that has a twenty year life

From the following estimates, determine the B/C ratio for a project that has a 20-year life. Use an interest rate of 8% per year.

  What are the monthly payments after the second year

What are the monthly payments after the second year? (Round the dollar amounts to the nearest cent but do not round other values in your interim calculations).

  Calculate sample variance and standard deviation

1. Arrange numbers in order and find Median and Mean. 2. Calculate Sample Variance and Standard Deviation.

  Determine what yield to maturity is the bond offering

A 7.05 percent coupon bond with 17 years left to maturity is offered for sale at $1,045.30. What yield to maturity is the bond offering

  Contrast the differences between option writing and option

Discuss the progression of the Markowitz portfolio model into the capital market theor

  Calculate the other party''s final cost

"Another company would be willing to pay our company a floating rate payment priced at 3-month Libor+25bp, while our company would have an obligation to pay a fixed rate of 5.55% annualized, with quarterly settlements. I'm not overly concerned with t..

  Calculate percentage increase in profitability

Adventure Airline has revenue of $140 million, fixed expenses of $100 million, and variable expenses of $38 million, which increases in proportion to revenue.

  Estimate the intrinsic value of the common shares

Firm A just paid a dividend of $2.50 per share. This dividend is expected to grow at a rate of 18% over the next three years and then grow at a rate of 3%.

  Multiple types of risk related to international finance

International companies face multiple types of risk related to international finance. Discuss the impact of the following types of risk on a multinational company:

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