You own $17,765 of Opsware, Inc. stock that has a beta of 3.73. You also own $24,310 of Lowe's Companies (beta = 1.97) and $4,675 of New York Times (beta = 1.08). Assume that the market return will be 13 percent and the risk-free rate is 6 percent. What is the market risk premium? 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: ou own $14,504 of Opsware, Inc. stock that has a beta of 3.85. You also own $20,384 of Lowe’s…

A: Calculation of Market Risk Premium, Risk Premium for each stock and Portfolio Risk Premium:The…

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: BLC Industries is expected to pay a dividend of $1.50, and the dividend is expected to grow at a…

A: The conceptual formula used:

Q: Diddy Corp. stock has a beta of 1.1, the current risk-free rate is 5 percent, and the expected…

A: The cost of equity can be calculated as per CAPM equation

Q: Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a…

A: We require to calculate the portfolio's beta in the above question. Portfolio beta can be calculated…

Q: Blast! stock has a beta of 0.8 and is currently selling for $22. Your DCF analysis indicates that…

A: In finance, the term “Alpha” represents a financial ratio that helps to measure the maximum return…

Q: You are thinking of buying a stock priced at $106 per share. Assume that the risk-free rate is about…

A: according to CAPM: Rstock =rf+β×rm-rfwhere,rf= risk free raterm= market return

Q: You expect the risk-free rate (RFR) to be 3 percent and the market return to be 10 percent. You also…

A: Using CAPM

Q: What is the company’s cost of common stock, rs?

A: Given information is: The common stock of Anthony Steel has a beta of 0.80.  The risk-free rate is 5…

Q: The risk-free rate of interest is 2.1% and the market return is 9%. Howard Corporation has a beta of…

A: Risk free rate (Rf) = 0.021 Market return (Rm) = 0.09 Beta (b) = 1.75 Required return = ?

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: Your broker has recommended that you purchase stock in Beacan, Inc. Beacan recently paid its annual…

A: Given information: Annual dividend is $14.00 ROE is 15% Retention ratio is 50%, pay-out is 50% Stock…

Q: Stock Ramsay Ltd. has an expected rate of return of 12% and beta of 1. Stock Gordon Ltd. has an…

A: Expected return of Ramsay = 12% Expected return of Gordon = 13% Rf = 5% Rm = 11%

Q: The DR Company’s common stock has a beta of 1.07. What is the company’s cost of equity capital if…

A: As per  Capital asset pricing model Cost of equity capital = Risk free + Beta×[Return of market -…

Q: The Rhaegel Corporation's common stock has a beta of 1.5. If the risk-free rate is 6 percent and the…

A: There are several methods for the calculation of cost of capital. All these methods are estimating…

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 are thinking of buying a stock priced at $98 per share. Assume that the risk-free rate is about…

A: Holding period return = Dividend paid + ( Price at year 1 - Price at year 0 ) / Price at year 0

Q: Smathers Corp. stock has a beta of 1.23. The market risk premium is 7.00 percent and the risk-free…

A: Calculating the cost of equity capital using the formula of capital asset pricing model. We…

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

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A: Using CAPM

Q: The common stock of Flavorful Teas has an expected return of 17.96 percent. The return on the market…

A: expected return =risk free rate + beta * (market return - risk free rate)

Q: Smathers Corp. stock has a beta of 1.23. The market risk premium is 7.00% and the risk- free rate is…

A: Following details are given in the question: Beta of Stock = 1.23 Market Risk premium = 7.00% Risk…

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: 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: 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: The expected return on Mike's Seafood shares is 15.8 per cent. If the expected return on the market…

A: Expected return of a stock can be calculated using Capital Asset Pricing Model (CAPM) as: = Risk…

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.

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A: Given, Beta = 1.1 Risk-free rate (Rf) = 5.1% Expected return of the market(Rm)  = 13%

Q: CEPS Group stock has a beta of 0.95. The risk-free rate of return is 3.75 percent and the market…

A:

Q: The Penny Corporation's common stock has a beta of 1.8. If the risk-free rate is 6.9% and the…

A: We require to calculate the Penny corporation's cost of equity capital in this question: As per…

Q: Suppose Pepsico's stock has a beta of 0.76. If the risk-free rate is 3% and the expected return of…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: B24&Co stock has a beta of 1.66, the current risk-free rate is 3.16 percent, and the expected return…

A: Here, Risk Free Rate is 3.16% Beta is 1.66 Expected Return on the Market is 10.66%

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A: The required rate of return is the minimum desired return by the investor. The required rate of…

Q: a. You expect an RFR of 10 percent and the market return (RM) of 14 percent. Compute the expected…

A: Part (a)RFR = 10%The market return, RM =  14%The expected return for a stock using CAPM equation is:…

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.

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A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets…

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A: Cost of equity = Risk free rate + beta(market return - risk free rate) Cost of equity = 5% +…

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A: Modigliani-Miller Theorem OR mm  theory says that if the debt to equity ratio of a firm increases…

Q: The Fraber Corporation's common stock has a beta of 0.6. If the risk-free rate is 1.7% and the…

A: Given:Fraber corporations common stock:Beta=0.6Risk free rate=1.7%Expected return on the…

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)

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A: Given: Risk free rate = 7% Beta = 1.3 Market return = 12.50%

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A: Given: Total value of investment = $215,000 Stock D beta = 0.86 Stock E beta = 1.39

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A: In the given question we require to calculate the cost of equity for B24&co