What is the expected return on the market

Assignment Help Financial Management
Reference no: EM13951543

Assume the CAPM holds, and you are given the following values:

Expected return on Malware stock = 12%

Risk-free rate = 3%

Beta of Malware stock = 2

What is the expected return on the market? Show your calculation.

Reference no: EM13951543

Questions Cloud

Theoretical minimum number of stations : An assembly line must be designed to produce 40 containers per hour. The following data in give the necessary information.
What is the face value of a zero coupon bond : What is the face value of a zero coupon bond that has a yield of 8.5%, matures in 6 years, and is currently selling for $404.54? Round your answer to the nearest dollar. Show your work.
Calculate the total gross pay for each employee. : Calculate the total Gross Pay for each employee. Keep in mind that employees are paid time and a half for all over-time hours. Here is an example formula that demonstrates how you would make such a calculation: =b4*d4+b4*c4*1.5 These must be formu..
At what contract price will you get a margin call : On Friday, December 12, the March 2016 S&P Index futures contract (i.e., the S&P contract which expires in March of next year) closed at 2000, down 40 points on the day. The value of the contract is set at 250 × the index. How much value did each con..
What is the expected return on the market : Assume the CAPM holds, and you are given the following values. Expected return on Malware stock = 12% What is the expected return on the market? Show your calculation.
Considering the purchase of bond due to mature : Suppose that an investor is considering the purchase of a bond due to mature in 30 years, carrying an 8 percent coupon rate (coupons are paid semi-annually). This security is available for purchase at a current market price of $975. The bond has a pa..
Net present value and internal rate of return : Calculate the following values for a project that requires an initial investment of $38,370 and has equal annual cash inflows of $10,000 each year for the next 8 years. Assume a cost of capital of 14%.
Prepare the adjusting entries for the month of may : a) Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal. b) Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column. Post the adjusting e..
Prepare a journal entry to close the variances : Prepare a journal entry to close the variances in requirements a through d to Cost of Goods Sold.

Reviews

Write a Review

Financial Management Questions & Answers

  Individual of understanding time value of money concepts

What is the importance for an individual of understanding time value of money concepts? For a corporate manager? Under what circumstance would the time value of money be irrelevant?

  Discuss the sources of the companys competitive advantage

Discuss the sources of the company's competitive advantage - Prepare a paper that discusses the following items. Current Investment and Project Activities: Discuss the primary business areas the company operates in.

  Local government decided to tax the interest income

Suppose your local government decided to tax the interest income on its own bonds as part of an effort to rectify serious budgetary woes. If, before the change in tax status, the yields on the bonds described were below the Treasury yield of the same..

  Compute the income tax and medicare contribution tax

Ms. Imo, who is single, purchased her first home in 1991 for $85,000, and sold it in May 2000 for $178,500. She purchased her second home in July 2000 for $385,000 and sold it this year for $700,000. a. Compute Ms. Imo's taxable gain on the 2000 sale..

  Large electric utility is looking to fix its cost of gas

Entergy, a large electric utility is looking to fix its cost of gas purchases over the next 3 years. Entergy currently buys gas in the spot market at the Henry Hub spot price. Describe the flow of payments if both parties agree to the swap terms.

  What is ratio of market value of equity to its book value

A firm has current assets that could be sold for their book value of $14 million. The book value of its fixed assets is $52 million, but they could be sold for $82 million today. The firm has total debt with a book value of $32 million, but interest ..

  Division qualifies as a component of the entity according

The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its strategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity accordin..

  Depreciation for tax and stockholder reporting purposes

Last year, Stewart-Stern Inc. reported $11,250 of sales, $4,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $3,500 of bonds outstanding that carry a 6.5% interest rate, and its federal-plus-state income tax..

  Explain your choices for reductions and increases

A Guide to the Federal Budget Process. Identify and explain your choices for reductions and increases

  Landscaping service but lee refused to pay

Clarkson and Lee did not have a contract, but Clarkson completed extensive landscaping in Lee’s yard by mistake while Lee was away on vacation. Clarkson sent Lee a bill for the landscaping service but Lee refused to pay. Determine the likely result i..

  Make a portfolio of these two stocks the least risky

Consider two stocks. If all their characteristics remain the same except for the correlation coefficient, which value of the correlation would make a portfolio of these two stocks the least risky?

  What annual savings can aqua system

Aqua System Inc. expects to have $16,080,600 in credit sales during the coming year. Currently all checks are sent to the home office. A proposed lockbox system can climate 5 days of float, releasing funds which when invested will earn 13.54 percent ..

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