Stock has expected return-risk-free rate-market risk premium

Assignment Help Financial Management
Reference no: EM13927691

A stock has an expected return of 15.8 percent, the risk-free rate is 6.3 percent, and the market risk premium is 7.5 percent. What must the beta of this stock be? Please show work.

Reference no: EM13927691

Questions Cloud

What are the primary reasons for holding inventory : What are the primary reasons for holding inventory?
How many wheels sets should the manager order : How many wheels sets should the manager order? When should the wheel sets be ordered?
The yield to maturity on the bonds : The total book value of WTC’s equity is $10 million, and book value per share is $20. The stock has a market-to-book ratio of 1.5, and the cost of equity is 15%. The firm’s bonds have a face value of $5 million and sell at a price of 110% of face val..
Calculate the arithmetic average return : Returns Year X Y 1 10% 19% 2 28 40 3 17 -9 4 -18 -23 5 19 48 Calculate the arithmetic average return for X. Calculate the arithmetic average return for Y. Calculate the variance for X. Calculate the variance for Y. Calculate the standard deviation fo..
Stock has expected return-risk-free rate-market risk premium : A stock has an expected return of 15.8 percent, the risk-free rate is 6.3 percent, and the market risk premium is 7.5 percent. What must the beta of this stock be?
One of marty''s partners has organized information on lead : One of Marty's partners has organized information on lead times, inventory on hand, and lot sizing rules established by suppliers Scheduled receipts are After the dotcom business he tried to start folded,
Accounting method applied to mortgage-backed securities : Explain how the accounting method applied to mortgage-backed securities made it more difficult for banks to satisfy capital requirements during the credit crisis
What is the before-tax cost of debt for olympic : Olympic Sports has two issues of debt outstanding. One is a 9% coupon bond with a face value of $32 million, a maturity of 15 years, and a yield to maturity of 10%. The coupons are paid annually. What is the before-tax cost of debt for Olympic? What ..
The payback method is biased towards short-term projects : The internal rate of return is the most reliable method of analysis for any type of investment decision. The payback method is biased towards short-term projects. The modified internal rate of return is most useful when projects are mutually exclusiv..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the sunk cost for new deluxe truck camper project

Hoosier Camper, Inc. is a manufacturer of truck campers. Its current line of truck campers are selling excellently. However, in order to cope with the foreseeable competition with other similar truck campers, HC spent $950,000 to develop a new line o..

  What price should it charge for these bonds

Arts and Crafts Warehouse wants to issue 15-year, zero coupon bonds that yield 7.5 percent. What price should it charge for these bonds if the face value is $1,000? (Assume semi-annual compounding.)

  Value of perpetuity making quarterly payments in arrears

What is the present value of a perpetuity making quarterly payments in arrears in the amount of $9,478 per quarter, and the appropriate annual rate of interest is 11.4%?

  Assume no taxation and perfect capital markets

Sims Corp. will buy back 900 of its 2500 shares outstanding. The return on equity before the buy-back is 14%. The debt-to-equity ratio before the buy-back is 1. Also, the company plans to keep a constant debt level, with an interest rate of 3%. Assum..

  What is the percentage change in the price of bond

Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to maturity, whereas Bond Dave has 19 years to maturity. If interest rates suddenly rise by 2 percent, what is the perc..

  Section of the course in the context of the size of a firm

Most of the examples in the text are medium or large companies. Think about the concepts of risk which are part of this section of the course in the context of the size of a firm. Would these change if the firm were large? Small ?  Medium-sized? Any ..

  Calculate the present value of an investment

Calculate the present value of an investment, given the following characteristics:  Calculate the rate of return on an investment, given the following information: (

  Present value for fixed future investment goal decreases

As interest rate increases, present value needed for fixed future investment goal decreases. Interest earned on both the initial principal and the interest reinvested from prior periods is called compound interest.

  Analysis of investment dear sir madamcan you please provide

dear sir madam ltbrgt ltbrgtcan you please provide me the attached solution plagiarism free. looking forward to hear

  The cost percentage of a new common stock issue

What is the cost percentage of a new common stock issue?

  What is a tranche

Explain how the design of a CMO supposedly helps to manage prepayment risk for investors. What is a tranche?

  Impact the rating of a bond

Which of the following would impact the rating of a bond?

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