Question

Asked Dec 9, 2019

12 views

**CAPM Required Return** A company has a beta of .99. If the market return is expected to be 10.4 percent and the risk-free rate is 3.20 percent, what is the company's required return?

Multiple Choice

A. 10.30%

B. 13.50%

C. 10.33%

D. 13.53%

1 Rating

Step 1

**Required Return: **It is the rate of return which is the least satisfactory return an investor may anticipate on the...

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: Cede & Co. expects its EBIT to be $80,000 every year forever. The firm can borrow at 4 percent. ...

A: Value of the unlevered firm is calculated as below:Answer: Value is $520000.00

Q: What is the size of debt for each firm? Assume that cost of debt = 8%; unlevered cost of capital = 1...

A: The firm with zero debts can be said as unlevered firm. This is so because these firm do not have fi...

Q: Suppose you borrow 11,000 for 5 years at 6% towards the purchase of a car. What would be the monthly...

A: The computation of monthly payments:Hence, the monthly payment is 212.66.

Q: To what extent does the company’s bond issuance policies support or hinder their strategies? For exa...

A: Bond:A bond is a loan that has a fixed interest or coupon rate. The investors who invest in bond get...

Q: The next dividend payment of a stock will be $2.50 per share. The dividends are anticipated to maint...

A: The required rate is the least rate of return that is expected by an investor from the investment.

Q: Zappy Inc. designs a new financial instrument that called the SafetyNet. This instrument gives the h...

A: The fair market price can be calculated with the help of taking the difference between present value...

Q: A project is estimated to cost $328,880 and provide annual net cash flows of $80,000 for six years. ...

A: Internal rate of return (IRR) is the rate at which the initial cash outflow (or cost) is equal to pr...

Q: TRD company is looking to expand their operations. They are evaluating their cost of capital based o...

A: The cost of equity is calculated below:

Q: You bought a stock of XYZ one year ago for $50 per share and sold it today for $55 per share. It pai...

A: 1.The realized return is 12%. Computation of realized return: