+1-415-670-9189
info@expertsmind.com
What is the required rate of return on stock
Course:- Financial Management
Reference No.:- EM13942925




Assignment Help
Assignment Help >> Financial Management

Stock A has a beta of 1.30, and its required return is 13.25%. Stock B's beta is 0.90. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)

1. 10.63%

2. 7.69%

3. 12.08%

4. 9.28%

5. 10.28%




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
The Holmes Company’s currently outstanding bonds have an 8% coupon and a10% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yie
Describe resources/capabilities that the company possesses. Analyze each of these with regard to the VRIO framework: Justify your response. Is it rare? Justify. Is it difficul
What is the effective annual rate (EAR) for each of the following one-year, $1,000 bank loans? A loan with an APR of 5.8%, compounded monthly. A loan with an APR of 5.8%, comp
Marvin & Co. expects its EBIT to be $49,000 every year forever. The firm can borrow at 8 percent. Meyer currently has no debt, and its cost of equity is 11 percent. If the tax
Sam was injured in an accident, and the insurance company has offered him the choice of $35,300 per year for 39 years, with the first payment being made today, or a lump sum.
A stock has a beta of 1.2 and an expected return of 11.8 percent. A risk-free asset currently earns 3.8 percent. (SHOW YOUR WORK) What is the expected return on a portfolio th
Which of the following multilateral institutions often insists that a country follow "austerity measures" designed to restore financial solvency as a condition of receiving a
Suppose CDE mines copper with fixed costs of $0.5/lb and variable costs of $0.4/lb. The 1 year forward price for copper is $1/lb. If CDE does nothing to manage risk. What is i