What must the risk-free rate be

Assignment Help Financial Management

Reference no: EM13763839

A stock has an expected return of 13.3 percent and a beta of 1.19, and the expected return on the market is 12.3 percent.

Required:

What must the risk-free rate be?

Reference no: EM13763839

Questions Cloud

How much will each annual payment be : Big Brothers, Inc. borrows $431,375 from the bank at 13.20 percent per year, compounded annually, to purchase new machinery. This loan is to be repaid in equal annual instalments at the end of each year over the next7 years. How much will each annual..

Purchase asset portfolio that exactly matches liabilities : A company must pay liabilities of $19000 and $11000 at the end of years 1 and 2, respectively. The only investments available to the company are 1 and 2 year zero coupon bonds with yields 6% and 7%, respectively. Calculate the cost to the company tod..

What bid price per widget should you submit : You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would ..

What is the present value of this investment : An investment will pay $1,351 two years from now, $2,973 four years from now, and $1,1303 five years from now. If the opportunity rate is 11.77 percent per year, what is the present value of this investment?

What must the risk-free rate be : A stock has an expected return of 13.3 percent and a beta of 1.19, and the expected return on the market is 12.3 percent. What must the risk-free rate be?

What was average annual growth rate of dividends for firm : A firm’s dividends have grown over the last several years. 10 years ago the firm paid a dividend of $2. Yesterday it paid a dividend of $7. What was the average annual growth rate of dividends for this firm? Round answer to two decimal places.

What are their overdraft protection fees : Fatimah and Ahmad wants you to do some research of three UAE banks on the internet to find the following information for them, so that they can choose the best Bank to invest, saving or take a loan. What kinds of Checking accounts do they offer, and ..

What amount will the investment accumulate : To what amount will the following investment accumulate? $18,117 invested today for 23 years at 3.48 percent, compounded monthly.

What was the average annual growth rate of marias salary : 8 years ago, Maria's annual salary was $36,936. Today, she earns $61,262. What was the average annual growth rate of Maria's salary?

User Account

All Pages