By how much does the required return on the riskier stock

Assignment Help Finance Basics
Reference no: EM13305026

Electro Inc. has a beta of 1.8, Flowers Galore has a beta of 0.9, the average return in the market is 12%, and the risk-free rate of return is 4.0%. By how much does the required return on the riskier stock exceed the required return on the less risky stock?

Reference no: EM13305026

Questions Cloud

Compute how many molecules are there in the gas : An ideal gas has a pressure of 2.5 atm, a volume of 1.0L at at temperature of 30 degrees Celcius. How many molecules are there in the gas
How to calculate the following questions in excel : How to calculate the following questions in excel? Suppose the standard deviation of the market return is 20%.
Find the maximum radius that this circle could have : A point source of light is submerged 2.5 m below the surface of a lake and emits rays in all directions. What is the maximum radius that this circle could have
Determine the number of molecules of pain reliever : Manufacturers of headache remedies routinely claim that their own brands are more potent pain relievers than the competing brands. Find the number of molecules of pain reliever
By how much does the required return on the riskier stock : Electro Inc. has a beta of 1.8, Flowers Galore has a beta of 0.9, the average return in the market is 12%, and the risk-free rate of return is 4.0%. By how much does the required return on the riskier stock exceed the required return on the less r..
What is your inheritance worth to you today : Your grandfather left you an inheritance that will provide an annual income for the next 10 years. You will receive the first payment one year from now in the amount of $4,000.
Is the image to the left or right of the lens : Four answers required for this problem. A converging lens has a focal length on both sides of 24.0 cm. Is the image to the left or right of the lens
What is the internal rate of return for your firm : What is the Internal Rate of Return (IRR) for your firm that requires an initial investment of $200,000, is expected to last for 10 years, and which is expected to produce after-tax cash flows of $44,503 per year if your firm's cost of capital is ..
What is the voltage drop across given resistor : This question requires three answers. Three resistors are connected in parallel with a 9.0 V battery. What is the voltage drop across R2

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the implied interest rate on a treasury bond

What is the implied interest rate on a Treasury bond ($100,000) futures contract that settled at 100'16? If interest increased by 1%, what would be the contract's new value?

  What is the common stockholder required rate of return

What is the common stockholder required rate of return?

  Firms business risk

When examining a Company financial structure, would you be concerned with the firm's business risk? Why or why not?

  Information about employee rights

What positive benefits could follow from a company's willingness to tolerate employee questions and criticisms about its actions and policies? How might a company best promote constructive discussion of these issues, especially as they relate to e..

  What type of promotion mix would you implement

Assume you were a marketing manager at a healthcare company selling dietary supplements and beauty products. What type of promotion (communication) mix would you implement? How would you integrate online media into the traditional promotion mix?

  What has the inflation rate been on gas

You currently have $400,000 and expect to spend $30,000 per year for twenty years. If the interest rate is 8%, how much will you have or how much will you owe in twenty years?

  How does investment banking firm selling strategy

How does the investment banking firm establish a selling strategy?

  Formula for pv of future balloon payment

When Federal Reserve notifies banks that they should hold fifteen cents for every dollar that is deposited, it is controlling the money supply by using which of following tools?

  Computation the payback period for a project

Computation the payback period for a project has the following costs and benefits

  Compute the incremental net income of the investment

The Best Manufacturing Corporation is planning a new investment. Financial projections for the investment are tabulated below. Cash flows are in $ thousands, and corporate tax rate is 34%.

  What is the accurate real rate of return on these securities

If inflation is anticipated to be 10 percent during the next year while a nominal rate of 20 percent will be earned on U.S. Treasury bills, then what is the accurate real rate of return on these securities?

  Explain international business involves currency market

Explain International business involves currency market and what should be the price of the same disc in Mexico

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