User Account

All Pages

What is the best estimate of the market risk premium

Assignment Help Business Economics
Reference no: EM132281225

If you had access to the following information, what is the best estimate of the market risk premium for use in determining Ke?

  • 5-year Treasury note = 2.9%
  • current stock price = $74.82
  • average annual return on S&P 500 over past five years = 10.3%
  • 6-month Treasury bill rate = 1.8%
  • company's unlevered beta = 1.09
  • tax rate = 27.0%

Enter your answer as a number rounded to the nearest 1st decimal. Do not enter dollar signs, percentage signs, or commas. There is no error range for this question.

For example, if you calculate 9.4382, enter 9.4.

Reference no: EM132281225

Questions Cloud

List each of these standards in the correct category : The following situations have caused you to become concerned about the quality of the upcoming external audit: Because of the fact that the audit will not begin
Operating capacity for the next six months : What does this imply about operating capacity for the next six months?
Capital by issuing new bonds : With increasing competition, your firm is considering raising more capital by issuing new bonds. This will increase the company's debt to about 30% of capital
Explain the main objectives of comparative analysis : In 150 words explain the main objectives of comparative analysis and why are they important to external users of the financial statements, such as investors?
What is the best estimate of the market risk premium : If you had access to the following information, what is the best estimate of the market risk premium for use in determining Ke?
Intrinsic value of rrv common stock : A share of common stock has just paid a dividend of $2.50. If the expected long-run growth rate for this stock is 4%, and if investors
Compare the pronouncements and the current gaap standards : For the company you selected in Unit 1, compare and contrast the following pronouncements and the current GAAP standards.
Characteristics of a purely competitive market : What are the characteristics of a purely competitive market? What makes these important? List at least two industries that are characterized by perfect competit
Elastic and inelastic goods or services : What are examples of both elastic and inelastic goods or services. How does their respective elasticity influence price changes or consumption behaviors?

Reviews

Write a Review

Business Economics Questions & Answers

  Consumption of gold offers people marginal utility

Suppose the consumption of gold offers people a marginal utility that diminishes as that person consumes more gold. Assume also that gold can be mined in unlimited amounts at the constant marginal costs, X (or chi), units of the nongold consuption go..

  Changes in marginal utility of moving along the budget line

Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem, 24 units of marginal utility from h..

  Monopoly produces widgets at a marginal cost

A monopoly produces widgets at a marginal cost of $8 per unit and zero fixed costs. It faces an inverse demand function given by P = 38 ? Q. Suppose fixed costs rise to $200. What will happen in the market?

  Calculate the changes in consumer and producer surplus

Calculate the price elasticity of gasoline. Calculate the price elasticity of demand for gasoline. Calculate the elasticity of supply using the information provided. Calculate the changes in consumer and producer surplus.

  Explain the economic espionage act of 1996

Explain the Economic Espionage Act of 1996. - What was the impetus for this law, and what penalties does it prescribe?

  Future maintenance costs for the fieldhouse

How much would the donors need to contribute to cover all future maintenance costs for the fieldhouse?

  Nash-cournot equilibrium-monopolistically competitive market

In a monopolistically competitive market, the government applies a specific tax of $1 per unit of output. What happens to the profit of a typical firm in this market? Does the number of firms in the market rise or fall? Please explain.

  Give the distribution of x

Let the average salary be $3,000 per year with a standard deviation of $6,000. We randomly survey 1,000 residents of that country.

  Can the euro surpass the dollar

Can you Express your opinion on "Can the Euro surpass the Dollar?"

  Charge of production decisions

You inherit a phosphate mining company and are now in charge of production decisions. You only have two years to extract all of the phosphate because in three years from now, an environmental regulation will go into effect banning mining in that area..

  Level of production is equivalent

Cost minimization for a given level of production is equivalent or identical the concept of product maximization for a given cost level. True of False. Explain. Please offer examples and the use of graphs where necessary, and state any assumption(s) ..

  Evaluate the business economics concepts

Clear focussed understanding of a topic. Critical analysis is an important test of the student's ability to evaluate business economics concepts.

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