ou own $14,504 of Opsware, Inc. stock that has a beta of 3.85. You also own $20,384 of Lowe’s Companies (beta = 1.89) and $4,312 of New York Times (beta = 1.17). Assume that the market return will be 16 percent and the risk-free rate is 7 percent.What is the market risk premium?  ___% What is the risk premium of each stock? (Round your answers to 2 decimal places.) Opsware’s risk premium _____.__ % Lowe’s risk premium _____.__ % New York Time's risk premium _____.__ %   What is the risk premium of the portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Portfolio Risk Premium: ___.__%

Q: Nine Point Industries recently paid its annual dividend of $4.42, and reported an ROE of 8%. The…

A: given, d0 = $4.42 roe=8% dividend payout = 50% beta= 1.62 rf=3.45% rm=18%

Q: The Rhaegel Corporation's common stock has a beta of 1.1. If the risk-free rate is 4.2 percent and…

A: The cost of equity capital is the sum of risk-free rate plus beta. It is calculated as follows: Cost…

Q: Examine the following book-value balance sheet for University Products Inc. The preferred stock…

A: Given information: Preferred stock selling for $15 per share Dividend is $3 per share Common stock…

Q: Achi Corp. has preferred stock with an annual dividend of $3.00. If the required return on​ Achi's…

A: Given Annual dividend =$3.00 Required return on Preferred stock =8%

Q: What is the market value of the outstanding preferred​ stock? b.  If an investor purchases the…

A: Valuing preferred share dividend  V = D/r where: V=The value D1​=The dividend  r = rate of return…

Q: Assume the market value of ABC's common stock, preferred stock, and debt are$7 million, $3 million,…

A: Part (a)All fiancials below are in $ million, except dividends and price which are in $.Market value…

Q: Express Steel Corporation wishes to calculate its cost of common stock equity, by using the capital…

A: CAPM is an abbreviation for capital asset pricing model which is used to determine the rate of…

Q: The Angelina Corporation’s common stock has a beta of 1.6. If the risk-free rate is 4.7 percent and…

A: The provided information are: Beta = 1.6 Risk free rate = 4.7% Expected return = 13%

Q: Handy Handbags (HH) recently paid a dividend of $2.00 (D0), which is expected to grow at 7%. HH’s…

A: Formulas: Cost of new common stock = (Expected dividend / Price*(1-Flotation cost)) + Growth rate

Q: Examine the following book-value balance sheet for University Products Inc. The preferred stock…

A: The market value of the firm represents the market value of each source of capital invested in the…

Q: Examine the following book-value balance sheet for University Products Inc. The preferred stock…

A: a) Computation:

Q: The Swanson Corporation's common stock has a beta of 1.07. If the risk-free rate is 3.4 percent and…

A: Cost of equity here will be the required rate of return. We need to calculate cost of equity or…

Q: Port Inc. has a 2-stock portfolio with a total value of $100,000.  $40,000 is invested in Stock A…

A: Beta of portfolio is the risk associate with the portfolio as a whole. Each stock has its own beta…

Q: Hoolahan Corporation's common stock has a beta of .87. Assume the risk-free rate is 3.6 percent and…

A: Risk free rate (Rf) = 3.6% Beta (B) = 0.87 Market return (Rm) = 11%

Q: Jack has $100,000 invested in a 2-stock portfolio. $35,000 is invested in Stock X and the remainder…

A: beta is a systematical measure of volatility or portfolio compared  to the market as a whole  beta…

Q: The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The…

A: Computation of BCCI’s Cost of equity capital is shown: Formulation is shown:

Q: The Rhaegel Corporation's common stock has a beta of 1.8. If the risk-free rate is 4.9 percent and…

A: 1. COST OF EQUITY CAPITAL :  = RISK FREE RATE + BETA X RISK PREMIUM  2. RISK PREMIUM :  = EXPECTED…

Q: The required rate of return on the Daisy Corporationʹs common stock is 11%, the current real rate of…

A: The expected return is the minimum required rate of return which an investor required from the…

Q: You own $17,765 of Opsware, Inc. stock that has a beta of 3.73. You also own $24,310 of Lowe's…

A: A combination of the different types of funds and securities for the investment is term as the…

Q: A stock is currently selling for $92.45 and is expected to sell for $109.07 in 1 year.  If the…

A: The overall return on an asset or investment portfolio over the time it has been kept is known as…

Q: The Angelina Corporation's common stock has a beta of 1.8. If the risk-free rate is 4.4 percent and…

A: Cost of equity = Risk free rate + (Expected market return - Risk free rate) * Beta

Q: The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The…

A: a) Hence, the cost of equity capital is 9.40%. Working note:

Q: Smathers Corp. stock has a beta of 1.24. The market risk premium is 6.90 percent and the risk-free…

A: Using CAPM

Q: The Graber Corporation's common stock has a beta of 1.6. If the risk-free rate is 4.7% and the…

A: Following details are given in the question for Graber Corporation: Beta = 1.6 Risk free rate = 4.7%…

Q: A biotechnology company's stock is currently selling for $48.35 per share. The earnings per share…

A: The Current Yield is the investment annual income which is divided by the current market price. It…

Q: ABC Company has just paid a dividend of $2.43 per share, and its dividend is expected to grow at a…

A: Dividend Growth Model Dividend Growth Model is used for valuation of  stock’s intrinsic value or…

Q: Silver Industries' Y shares have an expected return of 15%, a beta coefficient of 0.8 and a standard…

A: For the given risk and return, Comparison between two shares can be made basis coefficient of…

Q: tock of Devas Ltd has Risk-free rate of 8 percent, Beta of 0.7, Market return of 15 percent and…

A: The question can be answered by determining the expected return for the stock using the capital…

Q: The Rhaegel Corporation's common stock has a beta of 1.8. If the risk-free rate is 4.9 percent and…

A: given, beta = 1.8 risk free rate ( rf )= 4.9% expected return of market ( rm )= 11%

Q: Company C’s stock has beta 1.2, the risk-free rate is 6%, and the market expected return is 11%,…

A: Cost of Equity = Risk free Rate + [(Beta *(Market Return - Risk free Rate)]

Q: The ordinary shares of Mumford Quilt Company have a beta of 1.1. If the expected risk-free return is…

A: In this we have to use capital assets price model to calculate the expected rate of return.

Q: The common stock of Anthony Steel has a beta of 0.80.  The risk-free rate is 5 percent and the…

A: Cost of equity : As per capital asset pricing Cost of equity is calculated by the use of risk free…

Q: please use Excel) Preferred stock B sells for $45 in the market and pays an annual dividend of…

A: Market price of share = $ 45 Annual dividend = $ 4.60

Q: "The market capitalization rate on the stock of Aberdeen Wholesale Company is 11%, Its expected ROE…

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: Big Industries has the following market-value balance sheet. The stock currently sells for $20 a…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Handy Handbags (HH) recently paid a dividend of $2.00 (D0), which is expected to grow at 7%. HH’s…

A: Cost of retained earnings = Bond yield + Risk premium

Q: You have $10,000 to invest - $3,500 in Company ABC, the remaining amount in Company CBA. The…

A: Given: Amount = $10,000 Invested in ABC = $3,500 Return in ABC = 20% Return in CBA = 15%

Q: Steady​ Company's stock has a beta of 0.15. If the​ risk-free rate is 5.9% and the market risk…

A: The cost of equity capital means the least rate of return, a company must receive on its equity…

Q: The Rhaegel Corporation's common stock has a beta of 1.1. If the risk-free rate is 5.1 percent and…

A: In this we have to use capital assets pricing model to calculate the cost of equity.

Q: You are the investment manager for Global Assets Investments Company's mutual fund and you have…

A: Solution: (i). You pay cash for the stock : No. of the shares that we will able to buy =…

Q: Jones Design wishes to estimate the value of its outstanding preferred stock.  The preferred issue…

A:

Q: An investor has a three-stock portfolio with $25,000 invested inApple, $50,000 invested in Ford, and…

A: Stocks  Investment Estimated Beta Apple  25000.00 1.20 Ford 50000.00 0.80 Walmart 25000.00…

Q: Wildhorse Industries common stock has a beta of 1.8. If the market risk-free rate is 4.6 percent and…

A: Cost of common stock = Risk free rate + beta * (market return - risk free rate)

Q: The Rhaegel Corporation's common stock has a beta of 1.2.f the risk-free rate is 5 percent and the…

A: Cost of equity can be defined as the expected return demanded by the shareholders of a company. In…

Q: The Hudson Corporation’s common stock has a beta of 1.4. If the risk-free rate is 4.5 percent and…

A: Questions 1-2:Calculation of Cost of Equity Capital and WACC:The cost of equity capital is 13.60%…

Q: Zust preferred stock is selling for $42.16 per share and pays $1.95 in dividends. What is your…

A: Given details are : Current selling price of preferred stock = $42.16 Annual Dividend = $1.95 We…