Question: A stock has a beta of 1.05, the expected return on the market is 10 percent, and the risk-free rate is 3.8 percent. What must

A stock has a beta of 1.05, the expected return on the market is 10 percent, and the risk-free rate is 3.8 percent. What must the expected return on this stock be?

Step by Step Solution

★★★★★

3.46 Rating (175 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Input area Beta ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

283-B-C-F-R-A-R (516).xlsx

300 KBs Excel File

Students Have Also Explored These Related Corporate Finance Questions!

If the expected return on the market is 10 percent and the risk-free rate is 4 percent, what is the expected return for a stock with a beta equal to 1.5? What is the market risk premium for the set...

A stock has a beta of 1.15, the expected return on the market is 11 percent, and the risk-free rate is 5 percent. What must the expected return on this stock be?

A stock has a beta of 1.25, the expected return on the market is 11.5 percent, and the risk-free rate is 3.4 percent. What must the expected return on this stock be?

4. A stock has a beta of 1.15, the expected return on the market is 10 percent, and the risk-free rate is 4 percent. What must the expected return on this stock be? A. 10.39 % B. 11.90% C. 10.90% D....

5) You own a stock portfolio invested 35 percent in Stock Q, 30 percent in Stock R, 20 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .92, 1.25, 1.09, and 1.27,...

A stock has a beta of 1.05, the expected return on the market is 8 percent, and the riskfree rate is 3.2 percent. What must the expected return on this stock be? Multiple Choice 11.6% 7.83% 8.57%...

Easy Finance 101 question FAST POINTS What are the portfolio weights for a portfolio that has 156 shares of Stock A that sell for $45 per share and 130 shares of Stock B that sell for $30 per share?...

A stock has a beta of 1.38, the expected return on the market is 10 percent, and the risk-free rate is 5 percent. What must the expected return on this stock be? (Do not round intermediate...

Baraka Inc. common stock has a beta of 0.90. The expected return on the market is 10 percent, and the risk-free rate is 6 percent: Calculate 1. Market risk premium 2. Stock risk premium 3. Assume...

A stock has a beta of 1.38, the expected return on the market is 10 percent, and the risk-free rate is 5.0 percent. What must the expected return on this stock be? (Do not round intermediate...

Hits on a new business website occur quite infrequently. They occur randomly and independently with an average of six per week. Find the probability that the site gets more than 3 hits in a week.

(a)Determine the range for coefficient of x1 for which point A will remain optimal. Show your work, no marks will be given for simply writing down the range. (b) Determine the range for coefficient...

A company issues floating - rate bonds. The coupon rate is expressed as the three - month LIBOR plus a spread. The coupon payments are most likely to increase as:Group of answer choicesLibor...

Using the FIFO method, the equivalent units of production for conversion costs are a. 85,600 units. b. 88,800 units. c. 95,200 units. d. 98,400 units.

The 2014 balance sheet of Steelo, Inc., showed current assets of $4,630 and current liabilities of $2,190. The 2015 balance sheet showed current assets of $5,180 and current liabilities of $2,830....

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $1.95 million, and the 2015 balance sheet showed long-term debt of $2.28 million. The 2015 income statement showed an...

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed $670,000 in the common stock account and $4.1 million in the additional paid-in surplus account. The 2015 balance sheet showed $825,000...

Determine the transmembrane pressure required to maintain a flux rate of 220 Kg/ h m2 in a reverse osmosis system at 20 deg C when the feed solution is 9 % sucrose. The permeability coefficient rate...

URGENT An investment promises to pay you $400 per year starting in 5 years. The cash flow from the investment is expected to increase by 4 percent per year forever. If alternative investments of...

Directions: Select a product of which you will export to a foreign country. After your product is chosen, decide on a foreign country to which you will export. In developing your Export Business Plan...