Market risk premium and real risk-free rate

Assignment Help Financial Management
Reference no: EM13769162

Calculate the required rate of return for Manning Enterprises assuming that investors expect a 4.3% rate of inflation in the future. The real risk-free rate is 1%, and the market risk premium is 4%. Manning has a beta of 1.9, and its realized rate of return has averaged 12.5% over the last 5 years. Round your answer to two decimal places.

Reference no: EM13769162

Questions Cloud

What is the price of a perpetual bond with a par value : What is the price of a perpetual bond with a par value of $1,000.00 and a coupon rate of 7.25% (semi annual coupon)? The bond has a nominal yield to maturity of 6.90%.
Epidemiology concept issue : Which of the following examples involves indirect transmission of disease?
Environmental-awareness journal : Your assignment is to take a "field trip": a nature walk, a tour around your neighborhood, a bicycle ride, a trip to the city, or any kind of journey by any mode of transportation, that gets you out into your environment.
What is the effect of professional ache standards : What is the effect of professional ACHE standards on your ethical decision making
Market risk premium and real risk-free rate : Calculate the required rate of return for Manning Enterprises assuming that investors expect a 4.3% rate of inflation in the future. The real risk-free rate is 1%, and the market risk premium is 4%. Manning has a beta of 1.9, and its realized rate of..
Write a java sorting application with two classes : Write a Java Sorting Application with two classes, JavaSort and JavaSortTest. Your JavaSort Class, as a minimum must contain sorting methods for BubbleSort, InsertionSort, ShellSort, MergeSort, and QuickSort.
Pros and cons of corporations vs partnerships : Finally, in addition to reviewing the attached links, please write a one-page(single space) summary listing pros and cons of corporations vs. partnerships
Explain a book summary of the three signs of a miserable job : Write a book summary of The Three Signs of a Miserable Job: A Fable for Managers (And Their Employees) by Patrick Lencioni.
Determine the beta coefficient : Given the following information, determine the beta coefficient for Stock J that is consistent with equilibrium: rJ = 14.5%; rRF = 6.75%; rM = 8%. Bradford Manufacturing Company has a beta of 1.8, while Farley Industries has a beta of 0.55. The requi..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the monthly mortgage payment

Suppose you are buying your first house for $400,000 with 20% down payment. You have arranged to finance the remaining amount with a 30-year, monthly payment, amortized mortgage at nominal annual rate of 3.6%. What is the monthly mortgage payment?

  With the increasing use of digital payments and the

with the increasing use of digital payments and the decreasing use of cash payments enhanced digital security and

  What would be the total return of the bond in dollars

A 6.60 percent coupon bond with 15 years left to maturity is priced to offer a 5.3 percent yield to maturity. You believe that in one year, the yield to maturity will be 6.0 percent. What would be the total return of the bond in dollars? What would b..

  What is the modified internal rate of return mirr how is it

bullwhat is net present value npv how is it calculated and what is the basic premise of its decision rule?bullwhat is

  Consider the following data for abc enterprises all numbers

consider the following data for abc enterprises all numbers in euro today is january 1 2013 income statement for 2012

  Create synthetic callable debt from non-callable debt

You have graduated, and are on the staff of the Assistant Treasurer of company CKS. (You are an assistant to the Assistant Treasurer.) Your boss, the Assistant Treasurer, recently attended a conference at which he heard that swaptions could be used t..

  What is the estimated stocks current price

Company currently pays a dividend of $1.25 per share. It is estimated that the company's dividend will grow at a rate of 25% per year for the next 2years, then at a constant rate of 7% thereafter. The company's stock has a beta of 1.3, the risk-free ..

  Amount to use as annual sales figure when evaluating project

Winnebagel Corp. currently sells 35,000 motor homes per year at $73,000 each, and 14,500 luxury motor coaches per year at $110,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 30,000 of the..

  The expected return on the market portfolio

The expected return on the market portfolio is 15%. The standard deviation of return on the market portfolio is 12%. Beta of stock A is 1.2 and the standard deviation of return on stock A is 18%. What could be the expected return of stock A?

  A price to book ratio considers

A price to book ratio considers

  Compute the prospective costs of debt

Vale is the second largest mining company based in Brazil. Although it has recently expanded its operations in Africa, Asia, Latin America, it has not yet entered the North American market

  What are hospitals contribution margin-breakeven point

Your firm, General Hospital is a not-for-profit, acute care facility which has the following cost structure for its inpatient services. Your job is to determine based on your extensive knowledge of Cost behaviour and profit analysis theory and concep..

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