What is the stocks required return

Assignment Help Financial Management
Reference no: EM13972533

An analyst has modeled the stock of a company using the Fama-French three-factor mode. The rest-free rate is 5%, the required market return is 10%, the risk premium for small stocks (rSMB) is 3.2%, and the risk premium for value stocks (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = – 0.4, and di = 1.3, what is the stock’s required return? The answer has to be in an excel format.

Reference no: EM13972533

Questions Cloud

Bank reconciliation for nolan company : Nolan Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2015, its Cash account shows an $20,621 debit balance. Nolan's June 30 bank statement shows $1..
Social policy for a person voluntary intoxication : Is it wise social policy for a person's voluntary intoxication to be available to reduce the level of or even negate one's guilt? Remember that in these circumstances, there is no question as to who did the act in question. This boils down to a qu..
Expected net operating profit after taxes : Dernham Inc. has an expected net operating profit after taxes, EBIT (1-T), of $10,300 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,545 milllion, and net operating working capital (NOWC) is expec..
Calculate the charge on each capacitor : If V = 24V is applied across the whole network(Figure) , calculate the voltage across each capacitor.
What is the stocks required return : An analyst has modeled the stock of a company using the Fama-French three-factor mode. The rest-free rate is 5%, the required market return is 10%, the risk premium for small stocks (rSMB) is 3.2%, and the risk premium for value stocks (rHML) is 4.8%..
Parcel be after the stock dividend goes into effect : US Parcel Inc has 6100 shares of stock outstanding and a current stock price of $12.00 per share. The company has no debt. The company is currently short on cash and announces that instead of a cash dividend they will pay the following stock dividend..
Can john be charged with any crime as it relates to bill : John doe just purchased a new Glock handgun and has started carrying it with him in compliance with Maryland law. Can John be charged with any crime as it relates to Bill? If so, what would be the appropriate charge
The initial cost of the hotel project for the use of land : Boone Brothers purchased a parcel of land 9 years ago for $363,000. At that time, the firm invested $109,000 modifying the site so that it could be leased to an adjacent car dealer for displaying used car inventory.  What value should be included in ..
What is value of electric potential at center of square : What is the value of electric potential at (a) the center of the square and (b) a point midway between Q1 and Q4 in Figure P16.19? Here, q is q = 10 nC and a is a = 10 cm.

Reviews

Write a Review

Financial Management Questions & Answers

  Investment project scenario

Describe a healthcare organization’s investment project scenario of your own choosing, provide all relevant data, calculate and complete an NPV analysis, showing all calculations, and then interpret the result, ultimately advising whether the project..

  How many in dividends were paid to shareholders

New Money inc. reported $50 million of net income and $770 of retained earnings. the previous retained earnings were $780. How many in dividends were paid to shareholders during that year? Assume that all dividends declared were paid.

  What would her percentage return be in load fund return case

Alex invested $9,530 in a mutual fund at a time when the price per share was $10. The fund has a load fee of $50. How many shares did she purchase? Alex later sells her shares in the mutual fund for $12 per share. What would her percentage return be ..

  What expense did the company report

In their 2011 10-K report, eBay reported a stock option grant of 9,674 million options during the year, the fair-value of which was computed as $8.97. If the options have, on average, a five-year vesting period. What expense did the company report in..

  What is the most you would be willing to pay for blue grass

You are considering the purchase of a share of Blue Grass, inc. common stock. You expect to sell it at the end of one year for $87 a share. You will also receive a dividend of $5.36 per share at the end of the next year. If your required return on th..

  What is the internal rate of return on this new plant

Microwave Oven Programming, Inc is considering the construction of a new plant. The plant will have an initial cash outlay of $7.6 million (= -$7.6 million), and will produce cash flows of $3.7 million at the end of year 1, $4.1 million at the end of..

  What was his return on investment-shares of a mutual fund

Dane purchased 3000 shares of a mutual fund at an offer price of $6.03 per share. Later, he sold the investment for $3.64 per share. During the time Dane owned the shares, the fund paid a dividend of $0.52 per share. What was his return on investment..

  Target debt-equity ratio-cost of equity and debt

Sixx AM Manufacturing has a target debt-equity ratio of 0.46. Its cost of equity is 14 percent, and its cost of debt is 7 percent. If the tax rate is 36 percent, what is the company's WACC?

  What is the bonds yield to maturity

Rierson owns a garment factory in Spain and sells designer clothes to US and other European countries. He is trying attract some investments from US that he can use to expand further into the US market. He decides to invest into ten year 1,000 EURO G..

  Estimates the variable costs of producing one unit

Pandecker, Inc., estimates the variable costs of producing one unit to be $11.26. The company plans to produce 26,500 units. The fixed costs the company expects to incur are $82,770. What is Pandecker's break-even selling price?

  What is the present value of your winnings

You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $600,000 per year. Thus, in one year, you receive $1.6 million. In two years you get $2.2 million, and so on. If the appropriate interest..

  Considering two alternative methods of producing new product

A company is considering two alternative methods of producing a new product. The relevant data concerning the alternatives are presented below. Alternative I ?II Initial investment $64,000 $120,000 Annual receipts $50,000 $60,000 Annual disbursements..

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