What is the required rate of return on AAs stock

Assignment Help Financial Management
Reference no: EM13882102

Required Rate of Return

AA Industries's stock has a beta of 1.7. The risk-free rate is 5%, and the expected return on the market is 11%. What is the required rate of return on AA's stock? Round your answer to two decimal places.

%

Reference no: EM13882102

Questions Cloud

Describe three ways that bi changes raw data : Watch the video, "What is Business Intelligence?" and answer the following question: https://youtu.be/LFnewuBsYiY. Identify and describe three ways that BI changes raw data into comprehensive information
Toluene entering in the feed leaves in the liquid : A liquid containing 60 mol% toluene and 40 mol% benzene is continuously distilled in a single-equilibrium-stage unit at atmospheric pressure. What percent of benzene in the feed leaves in the vapor if 90% of the toluene entering in the feed leaves..
Calculate a weighted average contribution margin : Determine the number of milkshakes you will need to sell to break-even and calculate a weighted average contribution margin
Combined pentanes in the feed stream : The recovery of each main component in each product is to be 98%. For example, 98% of the propane in the feed stream is to appear in the propane-rich product, and 98% of the combined pentanes in the feed stream is to appear in the bottoms product ..
What is the required rate of return on AAs stock : AA Industries's stock has a beta of 1.7. The risk-free rate is 5%, and the expected return on the market is 11%. What is the required rate of return on AA's stock?
Which model would you choose for the engel expenditure curve : Which of these model(s) would you choose for the Engel expenditure curve and why?
Identify swap meet as primarily public sector undertaking : Identify the following as primarily public or private sector undertakings: eBay, farmer's market, state police department, car racing facility, travel agency, amusement park, gambling casino, swap meet, football stadium.
Describe the key initiatives currently underway at ach : Describe the key initiatives currently underway at ACH
Authoritative guidance for asset impairments under IFRS : Summarize the authoritative guidance for asset impairments under IFRS. Give at least two (2) examples of events that could cause an asset to be tested for impairment, and recommend the best method to determine the fair value of an impaired asset. Exp..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the marginal cost of borrowing

A bank offers two 30 year, fixed rate, fully amortizing LPMs: an 85% LTV loan at 6%, and an 80% LTV loan at 5.5%. What is the marginal cost of borrowing if the loan is going to be held for 10 years?

  Management install the network system

Management install the network system

  A company needs certain type of machine

A company needs a certain type of machine for the next 5 years. They presently own such a machine, which is now worth $6,000 but will lose $2,000 in value in each of the next 3 years, after which it will be worthless and unusable.

  Recoup the price you paid for the call-plus exercise price

You have purchased a call option contract on Smith & Smith common stock. The option contract is for 100 shares. The option has an exercise price of $ 43.00 and S&S’s stock currently trades at $40.00. The option premium is quoted at $ 2.00.

  What is the standard deviation of these returns

Kelly decided to accept the risk and purchased a high growth stock. Her returns for the past five years are 48 percent, 39 percent, -56 percent, 61 percent, and -24 percent, respectively. What is the standard deviation of these returns?

  Manufacture several lines of pressure washers

An industrial firm can manufacture several lines of pressure washers. The demand for a particular component required for a pressure washer is 120,000 per year. The firm has the following two options: Buy option: A supplier is willing to provide this ..

  Comment on the acceptability of the project

Calculate the net present value for a 10-year project with an initial investment of 10,000 and a cash inflow of 4,000 per year. Assume that the firm has an opportunity cost of 13%. Comment on the acceptability of the project.

  Determine the sources of credit available

Determine the sources of credit available (where can you get credit, advantages and disadvantages of the types).

  Evaluate the impact of a major customer

Analyse the current financial state of Anthony's Orchard and evaluate the impact of a major customer cancelling their expected order.

  Large public corporations with subsidiaries throughout world

Both Berkley and Oakley are large public corporations with subsidiaries throughout the world. Berkley uses a centralized approach and makes most of the decisions for its subsidiaries. Oakley uses a decentralized approach and its subsidiaries make man..

  Calculate this accounts mean daily balance

For the month of January, a checking account had a balance of $658 for 21 days, $1,832 for 6 days, and $517 for 4 days. Calculate this account’s mean daily balance for January. What is the median yearly salary for this group of residents?

  How government or market itself to solve problem

Write about the cause and the effect which until today. Also, write about how the government or the market itself to solve the problem.

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