### What is the real risk-free rate of return

Assignment Help Financial Management
##### Reference no: EM132012616

Real Risk-Free Rate

You read in The Wall Street Journal that 30-day T-bills are currently yielding 4.8%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:

On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. %

#### Questions Cloud

 Firm is considering purchasing computer system : A firm is considering purchasing a computer system. The following data has been collected. Determine how to pour the chemicals : When I first started my summer job I was told to wear old clothes and shown generally how to pour the chemicals. I was not provided any eye protection. What is the value of this project : In year 2, depreciation will be \$100,000 and earnings are expected to be \$209,998. Assume the required return is 9%. What is the value of this project? How much money does janice need now to fund : Janice believes she can invest her savings at 8% until she depletes her funds. How much money does Janice need now to fund her travels What is the real risk-free rate of return : On the basis of these data, what is the real risk-free rate of return? What is the expected value of each option : Suppose you have \$90 to invest or store in a safe deposit box. Your only alternative to storing is a stock which sells for \$90. The stock is an initial public. What could you do here to balance the proforma : What could you do here to balance the proforma? How many pages of text can the tablethold : For a plain textbook, one byte typically corresponds to one character and an average page consists of 2000 characters. How much will in-line tenants have to pay per square foot : CAM charges for retail leases in a shopping mall must be calculated. The retail mall consists ofa total area of 2.8 million square feet, of which 800,000 square

### Write a Review

#### What is cost of common stock

A firm's stock is selling for \$60. The next annual dividend is expected to be \$3.00. What is the cost of common stock.

#### Find expiration day payoff to seller

Find expiration day payoff (ignore the proceeds of initial sale) to a seller of

#### Investing in new machine to produce dog biscuits

You have been hired as a financial consultant by PJ corporation. PJ is considering investing in a new machine to produce dog biscuits.

#### Company computes variances at earliest point in time

Assume that the company computes variances at the earliest point in time.

#### Consider a project with the cash flows

Consider a project with the following cash flows -100, 230 and -134 at time 0, 1 and 2, respectively. Obtain the IRR(s) of the project. Consider a project with the following cash flows -100, 230 and -134 at time 0, 1 and 2, respectively. Obtain the N..

#### Free cash flow growth rate-current intrinsic stock price

This year, Huxley Building Supplies' free cash flow is \$1.75 million. Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. What is the best estimate of..

#### Calculate the value of the tax shield one and tax shield two

The company has just ordered a new kiln for \$480,000. Of this sum, \$58,000 is described by the supplier as an installation cost. The company does not know whether the Internal Revenue Service (IRS) will permit to treat this cost as a tax-deductible f..

#### Summarize different types of foreign exchange exposure faced

Summarize different types of foreign exchange exposure faced by the MNC. Identification and measurement of these risks. Explain the structure of international financial markets and institutions and the range of instruments traded therein.

#### Internal control procedures or transactions recorded

Explain how it is possible for an auditor to use sampling procedures to conclude whether the population of internal control procedures or transactions recorded

#### What must the risk-free rate be

A stock has an expected return of 12 percent, its beta is 1.35, and the expected return on the market is 10 percent. What must the risk-free rate be?

#### Bonds are currently selling at a conversion premium

The bonds are currently selling at a conversion premium of \$45 over their conversion value.

#### Calculate the WACC for TTT

Calculate the WACC for TTT. Assume TTT is in the 35% tax bracket. TTT has \$500 million face value of debt outstanding.