User Account

All Pages

The stock required rate of return

Assignment Help Financial Management
Reference no: EM13977631

A stock has a required return of 11 percent; the risk-free rate is 7 percent; and the market risk premium is 4 percent.

A) What is the stock's beta?

B) If the market risk premium increased to 6 percent, what would happen to the stock's required rate of return?

Assume the risk-free rate and beta remains unchanged.

Reference no: EM13977631

Questions Cloud

Interval for difference between population means : Using the appropriate statistical table, what is the most accurate statement we can make about the p-value for this test? Construct and interpret the 95% confidence interval for the difference between the population means.
Populations with equal standard deviations : Assuming normal populations with equal standard deviations, and using the 0.05 level of significance, does the new booklet appear to be better than the standard version?
Predict how fast the lady bug will rotate : Write a formula for the final angle θf an object will be at when it starts at an initial angle θi and rotates with an angular velocity ω for a certain interval of time.
Difference between the population means : Assuming normal populations with equal standard deviations, and using the 0.10 level, is there a significant difference between the two routes? Construct and interpret the 90% confidence interval for the difference between the population means.
The stock required rate of return : If the market risk premium increased to 6 percent, what would happen to the stock's required rate of return?
Estimate the dollar value of stolen property. : Maverick's tax return prepared at the end of 2014 revealed that the ended 2014 with a total inventory of $600,000. Maverick uses the same inventory account methods for tax and accounting purposes.
What is the force on charge q at the top of the triangle : Three charges Q, Q, and -Q are located at the corners of an equilateral triangle, as depicted in the figure. They all have magnitude Q = 3.13 μC. What is the force on charge Q at the top of the triangle?
Confidence limits for the number of minutes : On 32 of these occasions, the employee was talking on the telephone. For an 8-hour day, what are the upper and lower 95% confidence limits for the number of minutes this employee talks on the phone?
A long-distance swimmer is able to swim through still water : A long-distance swimmer is able to swim through still water at 4.0 km/h. She wishes to try to swim from Port Angeles, Washington, directly north to Victoria,

Reviews

Write a Review

Financial Management Questions & Answers

  An investment has an installed cost

An investment has an installed cost of $567,382. The cash flows over the four-year life of the investment are projected to be $196,584, $240,318, $188,674, and $156,313. Requirement 1: If the discount rate is zero, what is the NPV?

  What is your bonds rate of return over the year

You buy a(n) 6% coupon, 10-year maturity bond for $955. A year later, the bond price is $1,080. Assume coupons are paid once a year and the face value is $1,000. What is the new yield to maturity on the bond. What is your bond's rate of return over t..

  Some newer fixed assets which utilize latest in technology

MACRS 5-year property Year Rate 1 20.00% 2 32.00% 3 19.20% 4 11.52% 5 11.52% 6 5.76% Ronnie's Custom Cars purchased some fixed assets two years ago for $50,000. The assets are classified as 5-year property for MACRS. Ronnie is considering selling the..

  What is the expected return on the portfolio

You own a portfolio that is 32 percent invested in Stock X, 20 percent in Stock Y, and 48 percent in Stock Z. The expected returns on these three stocks are 6 percent, 19 percent, and 15 percent, respectively. What is the expected return on the portf..

  Accident victim has received a structured settlement

An accident victim has received a structured settlement. According to the terms of the agreement, the victim will receive $10,000 per year at the end of each year for the next 10 years. Additionally, the victim will receive $20,000 in 10 years.

  Expand your business by building a new manufacturing plant

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $11.8 million, which will be depreciated straight-line to zero over its four-year life.

  Discount interest-what is the interest rate on this loan

This question illustrates what is known as discount interest. Imagine you are discussing a loan with a somewhat unscrupulous lender. You want to borrow $20,000 for one year. The interest rate is 17.25 percent. What is the interest rate on this loan?

  How much is the bonds face value-bonds coupon

You are considering purchasing a 15-year 8% unsecured bond at a price of $960: How much is the bonds face value? How much is the bonds coupon? What is the bonds current yield?

  Find total profit if your position is long call in options

Find the total profit if your position is Long Call in options. The price per share at expiration is $53. All calls and puts are lots of 100 shares. Prices and premiums are per share. Position: Long Call Strike Price: $50 Premium paid: $2.50 Profit =..

  Black-scholes geometric brownian motion model

Compute the price of an American call option with strike K=110 and maturity T=.25 years. Compute the price of an American put option with strike K=110 and maturity T=.25 years. binomial model whose parameters should be calibrated to a Black-Scholes g..

  Problem 1arbitrage financial is offering two possible

problem 1arbitrage financial is offering two possible investments with the same level of risk.nbsp investment 1 is a

  Companys expected loss per year on this building

Suppose your company has a building worth $340 million. Because it is located in a high-risk area for natural disasters, the probability of a total loss in any particular year is 1.4 percent. What is your company’s expected loss per year on this buil..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd