Required rate of return on the market

Assignment Help Financial Management
Reference no: EM131060913

Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 12.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.)

Reference no: EM131060913

Questions Cloud

The growth rate falling off to constant : Janicex Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 11 percent and the company just paid a div..
Conduct a literature review that addresses current issues : Topic - Current Business Problem: Talent Gap/Management Faced By Australian Companies. Conduct a literature review that addresses current issues in research methods
Determining the implementation of the technology : While initially the focus was on implementation of the technology, it was found that success will require at least 10 hours of training over two days for all managers across the country on both the use of the new platform as well as a host of new ..
What is the portfolio beta : As an investment bank manager, you have the following three investments in your current portfolio. a.) GM shares: 900 shares, trade for $30/share, beta=0.9 b.) JP Morgan shares: 500 shares, trade for $80/share, beta=1.1 c.) MGM shares: 1000 shares, t..
Required rate of return on the market : Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 12.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.)
What were the pros and cons of reconstruction : What were the pros and cons of Reconstruction? How could rebuilding the South and helping the former slaves been improved? Why did Reconstruction collapse? Could it have been avoided?
What is the certainty-equivalent price : On the London Metals Exchange the price for copper to be delivered in one year is $3,530 a ton. (Note: Payment is made when the copper is delivered.) The risk-free interest rate is 0.58% and the expected market return is 8%. What is the certainty-equ..
What are the rights of dissenting shareholders : The Trapp Family Lodge, Inc. (TFL), was incorporated in 1962 as a holding company for certain assets of the Von Trapp family, including the Trapp Family Lodge, a resort hotel in Stowe, Vermont, and other assets, including certain royalty rights relat..
Calculate the maximum bending stress smax : Calculate the maximum bending stress σmax due to the load q if the beam has a rectangular cross section with width b = 140 mm and height h = 240 mm.

Reviews

Write a Review

Financial Management Questions & Answers

  What was charge for depreciation and amortization

Little Book Company recently reported an EBITDA of $5 million and net income of $1.2 million. It had $1 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?

  Find the required rate of return for hamlin in new venture

Hamlin Pharmaceuticals has $10 million in debt and $70 million in equity. Its tax rate is 35%, cost of debt 6%, and beta 1.5. The riskless rate is 3% and the expected return on the market 13%. Hamlin would like to start a newspaper using its existing..

  How long do you have to pay before the account is overdue

You place an order for 320 units of inventory at a unit price of $180. The supplier offers terms of 3/15, net 30. How long do you have to pay before the account is overdue? a-2 If you take the full period, how much should you remit? What is the disco..

  How does using more debt in capital structure

If a company's cost of capital is too high, how does using more debt in their capital structure instead of equity reduce that cost? What are the disadvantages of using too much debt

  Expansion project-requires initial fixed asset investment

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.49 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

  Management intends to hold the debt securities to maturity

Tsunami Sushi purchases $150,000 of 5-year, 6% bonds from Deep Sea Explorers, on January 1. Management intends to hold the debt securities to maturity. For bonds of similar risk and maturity, the market rate is 7%. At what amount will Tsunami Sushi r..

  Annual interest rates consider the effect of interest earned

Annual interest rates consider the effect of interest earned on reinvested interest payments: When comparing loans, you should compare the effective annual rates: Annual and effective interest rates are equal when interest is compounded annually:

  Annual dividend is maintained at the same level

A company just paid out an annual dividend of $2. If the annual dividend is maintained at the same level for the next 5 years, and grows at 5% annually thereafter, what should be the price of a share today? Assume that the required rate of return for..

  Irrelevance capital structure theory

The MM irrelevance capital structure theory proved that a firm's value is unaffected by its capital structure. But their study was based on some strong assumptions that: _____

  What is the effective annual cost of credit

Crawley, inc. has a line of credit with hnc bank that allows the company to borrow up to $800,000 at an interest rate of 12 percent. However they must keep a company's sting balance of 18 percent of any amount borrowed on deposit at the bank. They do..

  Invest in a portfolio containing stock

You have $130,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 14 percent and that has only 77 percent of the risk of..

  What is meant by the chutzpah defense

The Sarbanes-Oxley Act of 2002 enhanced corporate governance and accountability and stated implications for non-compliance of public companies. Name the six items of improved corporate governance. What is meant by the “Chutzpah Defense”? Is this type..

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