What must the risk-free rate be

Assignment Help Financial Management
Reference no: EM13911039

A stock has an expected return of 11.5 percent, its beta is 1.65, and the expected return on the market is 9.2 percent. What must the risk-free rate be?

Reference no: EM13911039

Questions Cloud

During the current month a company that uses a job order : During the current month, a company that uses a job order cost accounting system incurred a monthly factory payroll of $ 175,000, paid in cash.
Outline at least three specific trust building strategies : Outline at least three specific trust building strategies for an organization to gain the trust of consumers.
Disregard any cross product terms : Suppose 1-year T-bills currently yield 7% and the future inflation rate is expected to be constant at 3.2%per year. What is the real risk-free rate of return, r*? Disregard any cross product terms.
Identify three key challenges that an organization faces : Identify three key challenges that an organization faces in creating a successful e-commerce operation.
What must the risk-free rate be : A stock has an expected return of 11.5 percent, its beta is 1.65, and the expected return on the market is 9.2 percent. What must the risk-free rate be?
Savings from purchase gluon uses straight-line depreciation : Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. What is the equivalent annual savings from the purchase..
Identify the six stages consumers experience : Identify the six stages consumers experience in the sales life cycle that must be supported by a successful e-commerce system.
What is the mortgage constant : You borrow $75,000 for 30 years at 11% interest compounded annually. The value of the property is $100,000, PGI= $20,000, vacancy rates are 8%, and operating expenses are $81,000. What is the Mortgage constant? Please show me the work as well so I ca..
Prepare the journal entry to close the balance : Prepare the journal entry to close the balance in the Factory Overhead account to Cost of Goods Sold.

Reviews

Write a Review

Financial Management Questions & Answers

  Service produced by surgeon and nurses in operation room

What differences you can see in the product /service produced by a surgeon and nurses in the ‘operation room’ of a hospital for a patient, and a product/service produced by a professor and students in a class room environment. As a student what is yo..

  Although NOLs represent a potential source of value

Although NOLs represent a potential source of value, their use must be monitored carefully to realize their full value resulting from the potential for deferring income taxes. The sale of assets by a target firm will result in a taxable gain if the f..

  What is the firms pretax cost of debt

Birds of a Feather have 10-year bonds outstanding that carry an annual coupon of 8 percent. The bonds mature in 7 years and are currently priced at 110 percent of face value. What is the firm's pretax cost of debt?

  What will his annual payment be

Cal Lury owes $38,000 now. A lender will carry the debt for seven more years at 8 percent interest. That is, in this particular case, the amount owed will go up by 8 percent per year for seven years. The lender then will require that Cal pay off the ..

  Difference in buy term and invest the difference strategy

The "difference" in the buy term and invest the difference strategy is the difference in ______________ between term life insurance and whole life insurance. The primary reason life insurance policies have a savings element is to allow the

  Rate of return required by investors for owning a bond

The rate of return required by investors for owning a bond to its maturity is called the

  Identify whether you should use an average cost of bank fund

Identify whether you should use an average cost of bank funds or a marginal cost of funds in the following situations. a. Setting the rate on a new loan b. Evaluating the profitability of a long standing customer's relationship c. Calculating the ban..

  What is the average daily float

In a typical month, the Hampton Corporation receives 80 checks totaling $139000. These are delayed four days on average. What is the average daily float? Assume 30 days in a month.

  Current market value of this stock if the required return

Home Care Providers is paying an annual dividend of $1.10 every other year. The last dividend was paid one year ago. The firm will continue this policy until 2 more dividend payments have been paid (i.e. D1=1.1, D2=0 & D3=1.1). One year after the las..

  A firms dividends payable account increased

A firm's dividends payable account increased $10,000 during the year. The firm also declared $35,000 of dividends. What is the complete disclosure in the direct method SCF for these events?

  What is its self-supporting growth rate

Maggie's Muffins, Inc., generated $2,000,000 in sales during 2015, and its year-end total assets were $1,400,000. Also, at year-end 2015, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  Installs ventilation systems

Kholodny plc installs ventilation systems. At present its order book is rather thin and it has no work for the forthcoming period. It has been offered two contracts abroad, of wich it can take only one. Construct a decision tree to portray the situat..

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