What is the risk-free rate

Assignment Help Financial Management
Reference no: EM131452061

Suppose there are two stocks, one with expected return of 14% with a beta of 1 and the other with expected return of 17% with beta of 1.35. What is the risk-free rate?

Reference no: EM131452061

Questions Cloud

What lessons can you learn from the pinnacle west case : What lessons can you learn from the Pinnacle West case, and how might you apply those at your organization? Please be specific, and use citation as appropriate.
Explain the relationship between value and cost : In terms of Porter's value chain model, this process involves both the sales and operations activities.
Assume market risk premium : Stock of a company has covariance of 0.065 with the market portfolio. Assume market risk premium to be 7.5% and risk-free rate to be 2.5%.
What are your thoughts on the accountant-shopper framework : What are your thoughts on the “accountant-shopper” framework? Is it rational to revolve credit card debt in order to limit spending, e.g. of your partner?
What is the risk-free rate : Suppose there are two stocks, one with expected return of 14% with beta of 1 and the other with expected return of 17% with beta of 1.35. What is risk-free rate
Creates a complete international business report : This Major Assignment is in two parts and together creates a complete International Business Report. This assessment item is Part 1 of this report
Why are core values important to the organization : Describe the core values of organization. Develop a vision statement for this organization. Describe benefit and purpose for an organizational vision statement.
What is the break even price of this position : An investor sells a Corn CALL option with a strike price of $3.20 for $0.25. What is the break even price of this position?
Define the competitive strategy : Samantha Green owns and operates Twigs Tree Trimming Service. Samantha graduated from the forestry program of a nearby university and worked.

Reviews

Write a Review

Financial Management Questions & Answers

  Regarding the tax consequences of selling the fountain

Hazel owns an event planning company that specializes in very high-end events. Several years ago, Hazel purchased a magnificent chocolate fountain for $3,000 and has since taken $1,200 in depreciation deductions on the fountain. Which of the followin..

  Total real return on investment

You bought one of Rocky Mountain Manufacturing Co.’s 8.5 percent coupon bonds one year ago for $1,046.30. These bonds make annual payments and mature eleven years from now. If the inflation rate was 3.7 percent over the past year, what would be your ..

  What is the net income for the firm

Shelton, Inc., has sales of $389,000, costs of $177,000, depreciation expense of $42,000, interest expense of $23,000, and a tax rate of 35 percent. (Do not round intermediate calculations.) What is the net income for the firm? Suppose the company pa..

  The degree of financial leverage

A summarized income statement for Leveraged Inc. is presented below. Sales $1,000000 Cost of sales 600,000 Gross profit 400,000 operating expenses 250,000 Operating Income 150,000 Interest expense 30,000 Earnings before taxes 120,000 Income tax 40,00..

  Use for debt when calculating cost of capital

Liu Industrial Machines issued 152,000 zero coupon bonds five years ago. The bonds originally had 30 years to maturity with a yield to maturity of 7.2 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.3 ..

  What is net income and ROA

Diamond Eyes, Inc., has sales of $21 million, total assets of $18.3 million, and total debt of $9.5 million. Assume the profit margin is 9 percent. What is net income? (Enter your answer in dollars not in millions, i.e. 1,234,567.) Net income $ What ..

  Problems with aggregate demand or with aggregate supply

Was Romer arguing that the high unemployment in 2010 was largely due to problems with aggregate demand or to problems with aggregate supply? Briefly explain.

  Semi annual bonds outstanding-what is the yield to maturity

Signature Sweets, Inc. has 10 percent semi annual bonds outstanding with 20 years to maturity. The latest quote on these bonds is 120.00 percent of the face value. What is the yield to maturity?

  The lump-sum amount instead of the annuity

Katy won the Texas lottery. She can take a single lump-sum payout of $12.5 million dollars or receive $825,000 per year for the next 25 years. What rate of return would Katy need to break even if she took the lump-sum amount instead of the annuity?

  Raising the new capital through issuing convertible bonds

The following data apply to Frye Inc.: Frye Inc. needs to raise $30 million for its new project. Frye Inc. is considering raising the new capital through issuing convertible bonds which will be sold at par, carry a coupon rate of 6% - annually paid, ..

  Bank offering certificates of deposit yielding

You are saving to buy a $182,000 house. There are two competing banks in your area, both offering certificates of deposit yielding 6.7 percent. How long will it take your initial $99,000 investment to reach the desired level at First Bank, which pays..

  Prestigious investment bank designed a new security

A prestigious investment bank designed a new security that pays a quarterly dividend of $5.00 in perpetuity. The first dividend occurs one quarter from today.

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