What was market risk premium during these ten years

Assignment Help Financial Management
Reference no: EM131317822

The average annual return on an Index from 1996 to 2005 was 20.25 percent. The average annual T-bill yield during the same period was 3.65 percent.

What was the market risk premium during these ten years? (Round your answer to 2 decimal places.)

Average market risk premium %

Reference no: EM131317822

Questions Cloud

Value of portfolio after that change : 1) Calculate the value of your portfolio. 2) Calculate the D, G, W and k of your portfolio. 3) If the price goes up by $2 suddenly, what is the value of your portfolio after that change?
Calculate financial ratios-compare them to industry average : Financial Analysis Attached are the Financials for Adidas - calculate their financial ratios, compare them to industry averages, say what needs to be done to help the lower ratios.
Requires initial investment in spare parts inventory : CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $504,000 is estimated to result in $203,000 in annual pretax cost savings. The press also requires an initial investment in spare..
Does not qualify for bonus depreciation : Janis bought a 2012 Mercedes Benz S550 on 1 July 2016 for 70,000. She uses it 100% in her business as a folksinger. She wishes to take the maximum amount of depreciation and 179 expense allowed on the vehicle. How much of her $70,000 cost can she rec..
What was market risk premium during these ten years : The average annual return on an Index from 1996 to 2005 was 20.25 percent. The average annual T-bill yield during the same period was 3.65 percent. What was the market risk premium during these ten years?
What is the risk premium of the portfolio : You own $14,504 of Opsware, Inc., stock that has an assumed beta of 3.85. You also own $20,384 of Lowe’s Companies (assumed beta = 1.89) and $4,312 of New York Times (assumed beta = 1.17). What is the market risk premium? What is the risk premium of ..
Sole owner of a profitable firm : Suppose that there are corporate taxes, but all the other assumptions of Modigliani and Miller hold. You are the sole owner of a profitable firm, and you must decide how to finance its operations. The optimal path would be? Why?
What is the accounting break-even level of sales in terms : Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $120. The materials cost for a standard diamond is $60. The fixed costs incurred each year for factory upkeep and administrative expenses are $211,000. Wh..
Raises from debt holders vs equity holders : Under the assumptions of Modigliani and Miller, a firm’s average discount rate does not depend on the fraction of its financing that it raises from debt holders vs. equity holders. True or False? Why?

Reviews

Write a Review

Financial Management Questions & Answers

  Funds would probably have the lowest risk and return

Which of the following funds would probably have the lowest risk and return?

  What is the future value of annuity payment

What is the future value of a $810 annuity payment over four years if interest rates are 8 percent?

  Share repurchases tend to increase agency costs

Firms prefer to cut dividend payments rather than borrow money to fund a short-term cash need. Share repurchases tend to increase agency costs. Maintaining a steady dividend is a key goal of most dividend-paying firms.

  What term can be used in place of intrinsic value

A 10% coupon bond with semi annual payment a par value of K1,000.00 and has 3years to maturity is currently trading at K1,136. what is the bonds intrinsic value if the investor has required return of 8.1%. Kindly also explain what intrinsic value is ..

  What is the cost of equity for the corporation

The expected return on the market is 12%. The risk-free rate is 3.5%. The corporation has a current stock price of $65. There are 15 million shares outstanding. The beta for the stock is 1.6. What is the cost of equity for the corporation? What is bo..

  What rate of return are you earning on this policy

You just paid $350,000 for a policy that will pay you and your heirs $12,200 a year forever. What rate of return are you earning on this policy?

  Incorporating these new values and the real option

This question is a variant of the Sport Hotel example that was presented in class, in the class notes, and in the Real Option chapter. Suppose that the value of the hotel is not $8 million but instead is $9.5 million if the city is successful in obta..

  What range of annual production volume values is each method

The XYZ Company is faced with three proposed methods for making one of their products. Method A involves the purchase of a machine for $100,000. It will have a seven-year life, with a zero salvage at that time. what range of annual production volume ..

  The value of share of texas trucking is closest

Suppose that Texas Trucking (TT) has earnings per share of $3.55 and EBITDA of $55 million. TT also has 6 million shares outstanding and debt of $200 million (net of cash). Based upon the enterprise value to EBITDA ratio, the value of a share of Texa..

  Most protection from prepayment risk

What are the promised coupon payments to each of the classes during the first quarter? What is the total interest payment due? If the trustee received a payment of $4,834,796, how would the payment be applied? Assume that for the first year the trust..

  What is the value of the interest rate tax shield

A company has a wacc equal to 15.00%, a constant and perpetual expected EBITDA equal to 3,100,000 Euro, an unlevered return on equity of 22.53% and it keeps a constant debt-to-equity ratio. If the tax rate is equal to 25% and the assets are fully dep..

  What is the stock price at the start of year

Logitech stock is currently selling for $30 per share. The next expected annual dividend is $3 at the end of this year and the dividend growth rate is 6% per year. What is the stock price at the start of year 4 (end of yr 3)?

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