What is the required rate of return on aas stock

Assignment Help Finance Basics
Reference no: EM132895756

Problem - AA Corporation's stock has a beta of 0.8. The risk-free rate is 4%, and the expected return on the market is 12%. What is the required rate of return on AA's stock?

Reference no: EM132895756

Questions Cloud

What will portfolio new beta be after these transactions : You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. What will portfolio new beta be after these transactions
By how much does the required return on the riskier stock : The risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock
How person experience fits into american history : How the person's experience fits into American history by including other major events that were happening at the same time as events in the person's life.
Why you are seeking claim or adjustment : Why you are seeking a claim or adjustment. What actions are acceptable or that you expect
What is the required rate of return on aas stock : The risk-free rate is 4%, and the expected return on the market is 12%. What is the required rate of return on AA's stock
Describe dual-class share structure : Describe dual-class share structure. Is Alibaba's (ALB) ‘partnership structure" different from dual-class share structure?
What is the portfolio beta : Portfolio Beta - Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a beta of 0.7, What is the portfolio beta
What is anchoring bias : Question - What is anchoring bias? What is herding behavior? How can these contribute to market bubbles
What is the stock required rate of return : A stock has a beta of 0.8. Assume that the risk-free rate is 5.5% and that the market risk premium is 6%. What is the stock's required rate of return

Reviews

Write a Review

Finance Basics Questions & Answers

  Obesity and high cholesterol

Choose a minority group in our dominant North American culture that is discriminated against and their particular obstacles or challenges.

  Explain three accounts the cfo should review

The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days.

  Find the annualized interest cost

Suppose a firm is offered the following the terms are 1.1/9 net 30. Find the annualized interest cost?

  Find the minimum variance hedge ratio

You are a portfolio manager and you would like to hedge a portfolio daily over a thirty-day horizon using futures. The table below provides data on the values

  Appropriate dividend policy for royal industries

Required rate of return on equity, 10 per cent (a) What would be an appropriate dividend policy for Royal Industries? (b) What assumptions, if any, do you make

  Net patient service revenue

How is "net patient service revenue," on a hospital's operating statement, calculated?

  Does income smoothing indicate that you make more

Does income smoothing indicate that you make more or make less than what is actually earned over the calendar or fiscal year?

  Calculate the npv of investment

The farm is expected to produce revenue of $2.00 million each year, and annual cash flow from operations equals $1.80 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investme..

  Understand the costs involved in the type of plan

What steps would you take to better understand the costs involved in the type of plan you choose? Give one example.

  Expected rate of return

Company X bonds are selling in the market for $1,045. These 15 year bonds pay 7 percent annually on a $1,000 par value. If the bond is purchased at market price, what is the expected rate of return?

  What are capital investment

Introduction- What are capital investments? Domestic capital investment vs International capital investments (their differences, different factors)

  What is the change in the yield to maturity

William, who wrote a novel twenty years ago about a school for magicians, sues J.K. Rowling, author of the Harry Potter books, for copyright infringement. William will probably lose, because.

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