What must the risk-free rate be

Assignment Help Finance Basics
Reference no: EM13273654

A stock has an expected return of 13.5 percent, a beta of 1.40, and the expected return on the market is 11.5 percent. What must the risk-free rate be? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Reference no: EM13273654

Questions Cloud

Calculate the equivalent annual cost of each alternative : Both systems entail $2 million in operating costs; both will be depreciated straight-line to a final value of zero over their useful lives; neither will have any salvage value at the end of its life. The firm's tax rate is 35%, and the discount ra..
What is percentage cost of capital fo rpost-horizon period : After this, the free cash flows are expected to grow at a constant rate of 5%, and the capital structure will stabilize at 45% debt with an interest rate of 6.9%. What is the percentage cost of capital for the post-horizon period?
What is the net incremental tax cash flow : The firm's marginal tax rate is 34 percent and its required rate of return is 12%. What is the net incremental tax cash flow?
What is the annual depreciation expense : An asset cost $200,000 and is classified as a 10-year asset. What is the annual depreciation expense for the first three years under the straightline and the modified accelerated cost recovery systems of depreciation?
What must the risk-free rate be : A stock has an expected return of 13.5 percent, a beta of 1.40, and the expected return on the market is 11.5 percent. What must the risk-free rate be? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g.,..
Total mass of both components in a decaborane or oxygen : The best design for rockets is one in which both fuel materials run out at the same time to minimize excess mass. If the total mass of both components in a decaborane/oxygen rocket must be 1.951E+6g, what mass of liquid oxygen should be used
What is the intensity level of the sound wave : A sound wave from a siren has an intensity of 88.8 W/m2 at a certain point, What is the intensity level of the sound wave due to the ambulance
Explain what mass of acrylonitrile can be prepared : What mass of acrylonitrile can be prepared from 400.0 kg of propene, 100.0 kg of ammonia, and 650.0 kg of oxygen
What was the percentage gain or loss on the investment : The price of the stock subsequently fell to $38 before rising to $49 at which time Graham covered the position that is closed the short position. What was the percentage gain or loss on the investment. Please explain.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the definition of a non-owned auto

Does the PAP provide coverage if a named insured drives a non-owned auto? What is the definition of a "non-owned auto?"

  What is the depreciation tax shield

(a) Determine the annual net operating cash flows (OCF) generated by the machine. (b) What is the depreciation tax shield? c) Suppose the required rate of return is 12 percent, and the life of the project is 10 years. What is the project's NVP?

  Inflation, investment and costs

Steven & Dawn wanted to know how much it would cost to send their daughter Dawson to a private college. They have saved $20,000 to day for the purpose.

  What is the maturity risk premium for the 2-year security

The real risk-free rate is 3%, and inflation is expected to be 2% for the next 2 years. A 2-year Treasury security yields 7.9%. What is the maturity risk premium for the 2-year security?

  What is the remaining balance on your mortgage today

Could someone solve this problem by excle or a financial calculator? I rarely use formulas.

  Calculating time value of money

Your annual salary is $100,000. Every year for the next 30 years you plan to save 10 percent of your salary and invest-How much will you have in your account at the end of 30 years if your salary grows at 4 percent per year?

  What is the npv of the lease

The magic box would cost $3,600 to buy and would be straight-line depreciated to zero salvage value over three years. The firm can borrow at 6%, and the marginal corporate tax rate is 30%. What is the NPV of the lease?

  Compute the the cost of debt

J & B Inc. has $5 million of new debt to finance a project with a coupon rate of 12 percent, paid semiannually and has a par value of $1,000. The bonds will mature in 14 years and are priced at $850,

  Compute the weighted cost of capital

Compute the weighted cost of capital that is appropriate to use in evaluating this expansion program

  What is the income statement and what accounts are included

What is the income statement and what accounts are included in it? Where will you get this information from for your course project?

  Compute the cost of internal earnings

Verigreen Lawn Care products just pay a dividend of $1.85. This dividend is expected to increase at a constant rate of 3 percent per year, so the next expected dividend is $1.90.

  What was the amount of the costs incurred by the firm

The tax rate was 35 percent. What was the amount of the costs incurred by the firm for last year?

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