Beta and required rate of return stock

Assignment Help Financial Management
Reference no: EM131055647

Beta and required rate of return A stock has a required return of 16%; the risk-free rate is 5.5%; and the market risk premium is 3%.

a. What is the stock's beta? Round your answer to two decimal places.

b. New stock's required rate of return will be  %. Round your answer to two decimal places.

Reference no: EM131055647

Questions Cloud

What is the annual dividend yield : What is the annual dividend yield? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
How far does it let the federal government go : The regulations issued by Administrative Agencies have the same force and effect as laws passed by the legislature. How is that constitutional? What does that say about our representative form of government? Is it all an illusion? Why or why not?
What is the legal limit on current dividends : What is the legal limit on current dividends? (Do not round intermediate calculations. Input your answer in dollars, not millions (e.g., $1,234,000).)
Considering the purchase of an outstanding bond : It is now January 1, 2012, and you are considering the purchase of an outstanding bond that was issued on January 1, 2008. It has a 7 percent annual coupon and had a 30-year original maturity. what rate of return would you probably earn, assuming you..
Beta and required rate of return stock : Beta and required rate of return A stock has a required return of 16%; the risk-free rate is 5.5%; and the market risk premium is 3%. What is the stock's beta? New stock's required rate of return will be  %.
Cause analysis on a significant public health problem : B. Create a logic model (inputs, processes, outputs, outcomes) for solving the selected problem. Provide a 100-150 word summary explaining the logic model.
What is the family credit score : Mr. Childress has a $35,000 life insurance policy with a cash surrender value of $1,100.Suppose the lender uses the credit scoring system presented with this chapter and denies all application scoring fewer than 360 points. Is the Childress family..
Required return-what is the current share price : Terminal Emulator Co. pays a constant $11.66 dividend on its stock. The company will maintain this dividend for the next 11 years and will then cease paying dividends forever. If the required return on this stock is 14 percent, what is the current sh..
Npv of the higher npv project : Project A, a riskier-than-average project, will produce annual end of year cash flows of $ 90 . Project B, of less than average risk, will produce cash flows of $225 at the end of Years 3 and 4 only. List the NPV of the higher NPV project.

Reviews

Write a Review

Financial Management Questions & Answers

  Entities undertake capital budgeting activities

Entities undertake Capital Budgeting activities because of _____.

  What is the degree of operating leverage

At an output level of 50,000 units, you calculate that the degree of operating leverage is 3.50. Suppose fixed costs are $290,000. What is the operating cash flow at 44,000 units? What is the degree of operating leverage?

  Formulate a zero-net-investment arbitrage portfolio

The one-year futures price on a particular stock-index portfolio is 406, the stock index currently is 400, the one-year risk-free interest rate is 3%, and the year-end dividend that will be paid on a $400 investment in the index portfolio is $5. Form..

  Using activity based pricing marks up direct cost of goods

A company using activity based pricing marks up the direct cost of goods by 0.25 plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows : $7.30 per order placed; $2.50 per sep..

  What was the annual compound rate of growth in the price

In April 2013 a pound of apples cost $1.48, while oranges cost $1.12. Three years earlier the price of apples was only $1.27 a pound and that of oranges was $.98 a pound. a. What was the annual compound rate of growth in the price of apples What was ..

  Dividends will resume the historical growth

Killnum Corporation announces that the dividend for next period will be $5.00 per share rather than the originally expected $2.50 per share. From then on, it is expected that dividends will resume the historical growth of 5% per year. What would you ..

  What is the weighted average contribution margin per unit

Lambardi Company sells 3 types of bags. Bag A sells for $17 and has variable cost of $9.00 per unit. Bag B sells for $16 and has variable cost of $12.00 per unit. Bag C sells for $7 and has variable costs of $6.00 per unit. Lambardi sells in a mix of..

  What is the value of the shares held

Peter owns 25,000 shares of X Corporation stock. The company paid a 10% stock dividend. Before the dividend, Peter owned 10% of the outstanding stock, which had a market value of $250,000 or $10 per share. What is the value of the shares held by Pete..

  About the making plans for retirement

You and your wife are making plans for retirement. You plan on living 30 years after you retire and would like to have $80,000 annually on which to live. Your first withdrawal will be made one year after you retire and you anticipate that your retire..

  What amount of the claim would not be covered by insurance

Most home insurance policies cover jewellery for $1,000 and silverware for $2,500 unless items are covered with additional insurance. If $4,300 worth of jewellery and $5,600 of silverware were stolen from a family, what amount of the claim would not ..

  What is the economic order quantity-maximum inventory

Jones Surgicenter uses 90,000 bags of IV solution annually. The optimal safety stock (which is on hand initially) is 1,000 bags. Each bag costs the center $1.50, inventory carrying costs are 20 percent, and the cost of placing an order with its suppl..

  Opened several retail health insurance stores

Blue Cross Blue Shield of Florida (Florida Blue) has opened several retail health insurance "stores" around the state. Florida Blue has historically and continues to rely on intermediaries (agents, brokers, wholesalers) for their sales. How seriously..

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