The market risk premium is 5.41% and the yield on a Treasury bond is 1.02%. What is the fair return on this stock?Etsy, Inc. (ETSY)NasdaqGS - NasdaqGS Real Time Price. Currency in USD* Add to watchlist140.06 +5.56 (+4.13%)At close: November 20 4:00PM ESTSummaryCompany OutlookChartConversationsStati:Previous Close134.50Market Cap17.66BBeta (5YMonthly)Open136.521.59Bid139.90 x 1100PE Ratio (TTM)75.22Ask140.05 x 900EPS (TTM)1.86Day's Range136.26 - 143.96Earnings DateOct 28, 2020Forward52 Week Range29.95 - 154.88N/A (N/A)Dividend & YieldVolume4,258,608Ex-Dividend DateN/AAvg. Volume4,284,7901y Target Est160.12

Solution:- Capital Asset Pricing Model (CAPM) is the model which helps to compute the fair return on…

The market risk premium is 5.41% and the yield on a Treasury bond is 1.02%. What is the fair return on this stock? Etsy, Inc. (ETSY) NasdaqGS - NasdaqGS Real Time Price. Currency in USD * Add to watchlist 140.06 +5.56 (+4.13%) At close: November 20 4:00PM EST Chart Conversations Stati: Summary Company Outlook Previous Close 134.50 Market Cap 17.66B Beta (5Y Monthly) Open 136.52 1.59 Bid 139.90 x 1100 PERatio (TTM) 75.22 Ask 140.05 x 900 EPS (TTM) 1.86 Day's Range 136.26 - 143.96 Earnings Date Oct 28, 2020 Forward 52 Week Range 29.95 - 154.88 N/A (N/A) Dividend & Yield Volume 4,258,608 Ex-Dividend Date N/A Avg. Volume 4,284,790 1y Target Est 160.12

The market risk premium is 5.41% and the yield on a Treasury bond is 1.02%. What is the fair return on this stock? Etsy, Inc. (ETSY) NasdaqGS - NasdaqGS Real Time Price. Currency in USD * Add to watchlist 140.06 +5.56 (+4.13%) At close: November 20 4:00PM EST Chart Conversations Stati: Summary Company Outlook Previous Close 134.50 Market Cap 17.66B Beta (5Y Monthly) Open 136.52 1.59 Bid 139.90 x 1100 PERatio (TTM) 75.22 Ask 140.05 x 900 EPS (TTM) 1.86 Day's Range 136.26 - 143.96 Earnings Date Oct 28, 2020 Forward 52 Week Range 29.95 - 154.88 N/A (N/A) Dividend & Yield Volume 4,258,608 Ex-Dividend Date N/A Avg. Volume 4,284,790 1y Target Est 160.12

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 17PROB

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The market risk premium is 5.41% and the yield on a Treasury bond is 1.02%. What is the fair return on this stock? this is part of the questionAmazon.com, Inc. (AMZN) NasdaqGS - NasdaqGS Real Time Price. Currency in USD 3,099.40 - 17.62 (-0.57%) At close: November 20 4:00PM EST Summary Company Outlook Chart Conversations Sta Previous Close 3,117.02 Market Cap 1.555T Open 3,117.02 Beta (5Y Monthly) 1.30 Bid 3,102.80 x 800 PE Ratio (TTM) 90.62 Ask 3,104.75 x 900 EPS (TTM) 34.20 Day's Range 3,098.05 - 3,132.89 Earnings Date Jan 28, 2021 - Feb 01, 2021 52 Week Range 1,626.03 - 3,552.25 Forward Dividend & Yield N/A (N/A) Volume 3,380,138 Ex-Dividend Date N/A Avg. Volume 5,170,951 1y Target Est 3,812.78
Please answer both questions What is the risk premium for the stock in the table below? The risk free rate is 1.05% and the market risk premium is 5.41%. What is the expected return based on CAPM for the stock in the table below? The risk free rate is 1.05% and the market risk premium is 5.41%. The Home Depot, Inc. (HD) NYSE - NYSE Delayed Price. Currency in USD 264.55 -0.26 (-0.10%) At close: December 11 4:00PM EST summary Company Outlook Chart Conversations Stal Previous Close 264.81 Market Cap 284.815B Open 263.36 Beta (5Y Monthly) 1.05 Bid 264.15 x 1000 PE Ratio (TTM) 22.88 Ask 264.55 x 800 EPS (TTM) 11.56 Day's Range 262.65 - 265.36 Eamings Date Feb 23, 2021 52 Week Range 140.63 - 292.95 Forward Dividend & Yield 6.00 (2.27%) Volume 3,454,512 Ex-Dividend Date Dec 02, 2020 Arg. Volume 3,631,762 ly Target Est 305.06
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