What must the beta of this stock be

Assignment Help Financial Management
Reference no: EM13870715

A stock has an expected return of 14.6 percent, the risk-free rate is 5.70 percent, and the market risk premium is 7.3 percent.

Required: What must the beta of this stock be?

Reference no: EM13870715

Questions Cloud

Curiosity-creating value are key parts of entrepreneurial : Creativity, curiosity and creating value are key parts of the entrepreneurial mindset that won’t always prevent failure. Which of the following will help you avoid failure? “
What is the present value of this two-year loan : Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. The annual interest rate is 12% and payments begin in one month. What is the present value of this two-year loan?
Funding jill morans retirement annuity : Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms. Moran, by contract, will retire at the end of exactly 12 years. How large a sum must Sunrise accumulate by the end of ye..
What must the beta be for the other stock in your portfolio : You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.15 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio?
What must the beta of this stock be : A stock has an expected return of 14.6 percent, the risk-free rate is 5.70 percent, and the market risk premium is 7.3 percent. Required: What must the beta of this stock be?
Annuity symbols based on effective annual interest rate : A woman wants to prepare for retirement. On her 25th birthday she begins making monthly deposits of $Y into a fund which earns an annual effective interest rate of 8%. The last deposit is one month prior to her 65th birthday. Write an expression for ..
Savings account with discount rate per year : Danielle deposits $12,000 in a savings account with a discount rate of 10% per year. After 15 years, Danielle moves the money to an account that accumulates at a force of interest of 8%. At that same time, Danielle begins withdrawing money continuous..
What must the expected return on the market be : A stock has an expected return of 10.2 percent, its beta is 1.03, and the risk-free rate is 6.40 percent. What must the expected return on the market be?
Annual coupon rate paid semi annually : A few years ago Spider Web INC issued bonds with a 8.23 percent annual coupon rate paid semi annually. The bonds have a par value of $1000 a current price of $1092 and will mature in 20 years. What would the annual yield to maturity be on the bond if..

Reviews

Write a Review

Financial Management Questions & Answers

  Affects corporate governance and whether impact is positive

Explain how each of the following affects corporate governance and whether the impact is positive or negative.

  Reasonable estimate of the market risk-premium in percentage

Suppose CAPM works, and you know that the expected returns on Google and IBM are estimated to be 15.50% and 12.25%, respectively. You have just calculated extremely reliable estimates of the betas of Google and IBM to be 1.39 and 0.87, respectively. ..

  Interest on the sinking fund is compounded annually

A company agrees to repay a loan over five years. Interest payments are made annually and a sinking fund is built up with five equal annual payments made at the end of the year. Interest on the sinking fund is compounded annually.

  Relationship between yield to maturity and bond prices

Which of the following statements about the relationship between yield to maturity and bond prices is false?

  Different types of bonds such as treasury-corporate

There are alot of different types of bonds such as treasury, corporate, municipal, and foreign. Do all bonds have a return date?   Legally, The original maturates has a range from 10 to 40 years. What happens after 40 years if the business goes bankr..

  Most recent dividend per share paid on the stock

Teder Corporation stock currently sells for $30 per share. The market requires a 13.5 percent return on the firm's stock. If the company maintains a constant 8 percent growth rate in dividends, the most recent dividend per share paid on the stock was..

  Subtract to achieve the target debt ratio

Pace Corporation's assets are $625,000, and its total debt outstanding is $185,000. The CFO wants to employ a debt-to-assets ratio of 55%. How much debt must the company add or subtract to achieve the target debt ratio?

  What is the retailers effective cost of trade credit

A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's e..

  What was the firms 2011 operating cash flow or ocf

Suppose you also know that the firm's net capital spending for 2011 was $1,340,000, and that the firm reduced its net working capital investment by $63,000.

  Price of a non-dividend paying stock

The price of a non-dividend paying stock is $19.24 and the price of a 3-month European put option on the stock with a strike price of $20 is $4.22. The risk-free rate is 5% per annum. What is the price of a 3-month European call option with a strike ..

  Supply and demand analysis and marginal analysis

Discuss why both supply and demand analysis and marginal analysis must be used in making rational business decisions. Please include specific examples in your discussion posts. Also include the difference between substitutes and complements and the d..

  Explain site analysis performed by a consulting firm

The site analysis performed by a consulting firm (at a cost of $50,000 to General Food) shows that the land is suitable for the plant. The plant will cost $5.5 million to build.

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