What must the expected return on this stock

Assignment Help Financial Management
Reference no: EM13911140

A stock has a beta of 1.20, the expected return on the market is 14 percent, and the risk-free rate is 4.50 percent. What must the expected return on this stock be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Reference no: EM13911140

Questions Cloud

Straight-line depreciat-what is average accounting return : A project has an initial cost of $35,000 and a four-year life. The company uses straight-line depreciation to a book value of zero over the life of the project. The projected net income from the project is $1,100, $1,300, $1,600, and $1,800 a year fo..
If the yield curve is downward sloping : If the yield curve is downward sloping, which of the following statements is correct?
What is the role of the general ledger system in keeping : What is the role of the general ledger system in keeping track of the financial transactions of the organization? How is it used?
Yield to maturity-what is the duration of this bond : A bond currently sells for $1,050, which gives it a yield to maturity of 6%. Suppose that if the yield increases by 25 basis points, the price of the bond falls to $1,025. What is the duration of this bond?
What must the expected return on this stock : A stock has a beta of 1.20, the expected return on the market is 14 percent, and the risk-free rate is 4.50 percent. What must the expected return on this stock be?
What is the difference between managerial and financial : What is the difference between managerial and financial accounting?
What are the business processes included with the scope : What are the business processes included with the scope of product life cycle management?
What is the role of a crm system : What is the role of a CRM system? What sort of benefits can such a system produce for a business?
How does materials requirement planning support : How does materials requirement planning support the purchasing process? What are some of the issues and complications that arise in materials requirement planning?

Reviews

Write a Review

Financial Management Questions & Answers

  What is best estimate of CDBs cost of equity

Stock in CDB Industries has a beta of .99. The market risk premium is 7.4 percent, and T-bills are currently yielding 4.4 percent. CDB’s most recent dividend was $2.80 per share, and dividends are expected to grow at a 5.4 percent annual rate indefin..

  Calculate the project’s initial time 0 cash flow

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant over..

  What is the yield to maturity of bond

What is the yield to maturity of a 23-year bond that pas a coupon rate of 8.25% per year, has a $1,000 par value, and is currently priced at $1,298.05? Assume semi-annual coupon payments. Round the answer to two decimal places in percentage form.

  What will be the cost of equity capital of the levered firm

A firm has zero debt and an overall cost of capital of 12.5 percent. The firm is considering a new capital structure with 55 percent debt at an interest rate of 6.5 percent. Assume there are no taxes or other imperfections. What will be the cost of e..

  Assuming that stock market is efficient-receive full credit

Assuming that the stock market is efficient, is each of the following statements true or false (to receive full credit, you must explain why in two or three sentences or with an example)? The stock price of Company X doubled over the past year, the s..

  What is the discounted payback period

A project has an initial cost of $8,900 and produces cash inflows of $2,700, $5,100, and $1,700 over the next three years, respectively. What is the discounted payback period if the required rate of return is 7 percent?

  Expansion project-requires initial fixed asset investment

Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.85 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wort..

  Performance evaluation and compensation formulas

Explain how a firm may have to change its performance evaluation and compensation formulas for managers if it adopts a “real options” approach

  Computers operates plant with annual capacity

A manufacturer of laptop computers operates a plant with an annual capacity of 6,630,000 laptop units. One of its models is expected to sell 390,000 units in the coming year. How large should each product lot be if it costs $575 to change production ..

  Consider an annual coupon bond with face value

Consider an annual coupon bond with a face value of $100, 12 years to maturity, and a price of $95. The coupon rate on the bond is 4%. If you can reinvest coupons at rate of 2% per annum, then how much money do you have if you hold the bond to maturi..

  What is the monthly payment-loan to make renovations

You borrow $50,000 5 year loan to make renovations to a house. The interest rate on this loan is 8% per year. The loan calls for equal monthly payments. What is the monthly payment on this loan?

  Theoretical method using the new yield to maturity

A 1000 seven-year 6% bond with semi-annual coupons is redeemable for 1065. It was originally purchased at issue for 970. It is sold after 45 months for 995. Find the accrued interest by the theoretical method using the new yield to maturity.

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