Required Rate of Return Suppose rRF = 5%, rM = 10%, and rA = 8%. Calculate Stock A's beta. Round your answer to one decimal place. If Stock A's beta were 1.2, then what would be A's new required rate of return? Round your answer to one decimal place. %
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Suppose rRF = 5%, rM = 10%, and rA = 8%.
- Calculate Stock A's beta. Round your answer to one decimal place.
- If Stock A's beta were 1.2, then what would be A's new required rate of return? Round your answer to one decimal place.
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- An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?Required Rate of Return Suppose rRF = 5%, rM = 10%, and rA = 9%. Calculate Stock A's beta. Round your answer to one decimal place. If Stock A's beta were 1.2, then what would be A's new required rate of return? Round your answer to one decimal place. %Suppose rRF = 4%, rM = 9%, and rA = 10%. Calculate Stock A's beta. Round your answer to one decimal place. If Stock A's beta were 1.6, then what would be A's new required rate of return? Round your answer to one decimal place. %
- Suppose rRF = 6%, rM = 10%, and bi = 1.8. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % 1. Now suppose rRF increases to 7%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will remain the same. Both rM and ri will increase by 1 percentage point. rM will remain the same and ri will increase by 1 percentage point. rM will increase by 1 percentage point and ri will remain the same. Both rM and ri will decrease by 1 percentage point. 2. Now suppose rRF decreases to 5%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will remain the same. Both rM and ri will decrease by 1 percentage point. rM will decrease by 1 percentage point and ri will remain the same. rM will remain the same and ri will decrease by 1 percentage point. Both rM and ri will increase by 1 percentage point. 1. Now assume that rRF remains at 6%, but rM increases to 11%.…Required Rate of ReturnSuppose rRF 5 5%, rM 5 10%, and rA 5 12%.a. Calculate Stock A’s beta.b. If Stock A’s beta were 2.0, then what would be A’s new required rate ofreturn?Suppose rRF = 4%, rM = 11%, and bi = 1.6. A. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. % B. 1. Now suppose rRF increases to 5%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will decrease by 1 percentage point. Both rM and ri will remain the same. Both rM and ri will increase by 1 percentage point. rM will remain the same and ri will increase by 1 percentage point. rM will increase by 1 percentage point and ri will remain the same. C. Now suppose rRF decreases to 3%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will remain the same. Both rM and ri will decrease by 1 percentage point. rM will decrease by 1 percentage point and ri will remain the same. rM will remain the same and ri will decrease by 1 percentage point. Both rM and ri will increase by 1 percentage point. D. 1. Now assume that rRF remains at 4%, but rM increases to 12%.…
- Consider the following for a firm. Its stock price (P0) is at $50, its payout ratio (POR) is 0.4, its EPS1 is $2.00, and investor required return is 10%.. What is the percent of capital gains?DONOT SOLVE ON EXCEL USE PROPER FORMATESuppose rRF = 4%, rM = 11%, and bi = 1.5. What is ri, the required rate of return on Stock i? Round your answer to two decimal places. % 1. Now suppose rRF increases to 5%. The slope of the SML remains constant. How would this affect rM and ri? Both rM and ri will decrease by 1%. Both rM and ri will remain the same. Both rM and ri will increase by 1%. rM will remain the same and ri will increase by 1%. rM will increase by 1% and ri will remain the same.A company has a beta of 0.6, the T-bill rate is 4.3%, and the expected return on the market is 13.66%. What is its required rate of return? Do not round your intermediate calculations. Express as a percent rounded to two decimal places.
- If D1 = $1.75, g (which is constant) = 5%, and P0 = $50, what is the stock's expected total return for the coming year? (Round your answer to 2 decimal places.) Please work out the problem, do not use excel.The current risk-free rate of return, rRF, is 2 percent and the market risk premium, RPM, is 8 percent. If the beta coefficient associated with a firm's stock is 1.4, what should be the stock's required rate of return? Round your answer to one decimal place. _______ ´%Required Rates of Return Suppose that the risk-free rate is 5% and that the market risk premium is 8%. Round your answers to one decimal place. What is the required return on a stock with a beta of 0.6? %
