Compute the risk premium for the stock, Finance Basics

Compute the risk premium for the stock of Omega Tools if the risk free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of .8. 

 

Omega Tools

     

a

Risk Free rate (Rf)

   

6%

b

Expected market return (Rm)

 

12%

c

Risk Premium

   

6%

 

(b - a) or (Rm - Rf)

     

 

Posted Date: 7/23/2012 2:11:40 AM | Location : United States







Related Discussions:- Compute the risk premium for the stock, Assignment Help, Ask Question on Compute the risk premium for the stock, Get Answer, Expert's Help, Compute the risk premium for the stock Discussions

Write discussion on Compute the risk premium for the stock
Your posts are moderated
Related Questions
Investment Opportunity and Capital Structure Investment Opportunity Lack of suitable investment opportunities, that is so, by positive returns or N.P.V., may encourage a

The construction of a highway is broken into 14 activities as shown in the following table. Draw a bar chart of this construction project. Activity ID Desc

Below is information provided for two companies, A and B.  Assuming a risk-free rate of 2.5%, an effective tax rate of 40%, and a market risk premium of 5.5%, estimate th



The operating profit (EBIT) of ABC Ltd is Rs. 1,60,000. Its capital structure consists of the following: 10% Debentures Rs. 500000 12% Preference Shares 1

Illustrates the roles of money? Roles of Money: a. A medium of exchange An asset which individuals obtain for the intention of trading quite than for their own consump

An insurance company offers you and end of year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9%. What is the most you would be willin

what are the qualitative factors to be considered when deciding on product mix

Percentage of Sales Method - Financial Forecasting This method includes expressing various balance sheet items such are directly concerned to sales as a percentage of sales.