If share C has a beta of 1,3; the risk-free rate is 8% and market risk premium is 7%, what would the associated cost of equity be? a. 24.2% b. 10.4% c. 21.6% d. 17.1%
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If share C has a beta of 1,3; the risk-free rate is 8% and market risk premium is 7%, what would the associated
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- 2. Capital Asset Pricing Model Risk-free rate : 2.5% Market rate of return: 8.5% Beta: .90 Using the information above, calculate the risk of the stockEquity Beta = 0.95 Asset Beta = 0.60 What is the difference between the two betas?Consider the following information for Vine Inc.: Beta: 1.39 Risk-free rate: 7% Market Risk Premium: 11% What is the cost of the common equity of Vine Inc.? 22.29% 19.21% 32.02%
- Assume that the risk-free rate of return is 4% and the market risk premium (i.e., Rm - R;) is 8%. If use the Capital Asset Pricing Model (CAPM) to estimate the expected rate of return on a stock with a beta of 1.28, then this stock's expected return should be A) 10.53% B) 14.24% 23.15% 6.59%D1 = $1.25, g = 6.00%, β = 1.15, market risk premium = 5.5%, and risk free rate = 4 %. Find the stock price $28.90 $28.62 $29.36 $30.12If the risk-free rate is 10.2% and the market risk premium is 4.4%, what is the required return for the market? a. 5.8% b. 4.4% C. 14.6% d. 10.2%
- Assume that Temp Force has a beta coefficient of 1.2, that the risk-free rate (the yield on T-bonds) is 7.0%, and that the market risk premium is 5%. What is the required rate of return on the firms stock?suppose a risk free rate is 6% and the market premium is 7%. D1 is 1.25 per share and stock beta is 1.15. What is the required return?The asset of company X have a beta equal to 1. Assume that company’s debt has a beta to 0.5 and that X’s equity has a Beta equal to 2, consider an investor who holds 10% of company’s debt and 10% of the company’s equity, the beta of the investor’s portfolio is equal to? A. 0.25 B. 1 C. 1.25 D. 0.1
- For an investment in a stock, the probability of the return being -10.0% is 0.3, 10.0% is 0.4, and 30.0% is 0.3. Given the probability distributions, what is the expected rate of return for the investment?Choices:A. 10.00%B. 9.50%C. 15.00%D. 12.50%E. 13.00%Consider the following simplified APT model: Factor Expected Risk Premium Market 6.4% Interest Rate -0.6% Yield Spread 5.1% Factor Risk Exposures Market Interest Rate Yield Spread Stock Stock(b1) (b2) (b3) P 1.0 -2.0 -0.2 P2 1.2 0 0.3 P3 0.3 0.5 1.0 Required: 1. Calculate the expected return for the above stocks. Assume risk free rate is 5%. Consider a portfolio with equal investments in stocks P, P2 and P3 2.What are the factor risk exposures for the portfolio? 3.What is the portfolio’s expected return?1. Suppose your company has an equity beta of .58 and the current risk-free rate is 6.1%. If the expected market risk premium is 8.6%, what is your cost of equity? Group of answer choices A) 14.7% B) 11.1% C) 9.64%