Rambo Enterprises, Inc. stock has a beta of 1.12. The risk-free rate of return is 2.46 percent
Question:
Rambo Enterprises, Inc. stock has a beta of 1.12. The risk-free rate of return is 2.46 percent and the market risk premium is 5.26 percent. What is the expected rate of return on this stock?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 85% (14 reviews)
Use CAPM formula R e R f R m R f where R e stocks expected or ...View the full answer
Answered By
Keziah Thiga
I am a self motivated financial professional knowledgeable in; preparation of financial reports, reconciling and managing accounts, maintaining cash flows, budgets, among other financial reports. I possess strong analytical skills with high attention to detail and accuracy. I am able to act quickly and effectively when dealing with challenging situations. I have the ability to form positive relationships with colleagues and I believe that team work is great key to performance. I always deliver quality, detailed, original (0% plagirism), well-researched and critically analyzed papers.
4.90+
1504+ Reviews
2898+ Question Solved
Related Book For
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
Question Posted:
Students also viewed these Accounting questions
-
1. The net realizable value of the inventories as at 15 February 2020 is RM1,500,000. 2. Freehold land consists of Land Jelebu and Land Kemaman with carrying value of RM4,000,000 and RM4,400,000...
-
The Tubby Ball Corporations common stock has a beta of 1.05. If the risk-free rate is 5.3 percent and the expected return on the market is 12 percent, what is the companys cost of equity capital?
-
Suppose the risk free rate of return is 6%, maturity risk premium is 2%, inflation premium is 4%, the default risk on similar debt is 3%, and the liquidity premium is 2%. What is the nominal interest...
-
Estimate the errors involved in Exercise 63, parts (a) and (b). How large should be in each case to guarantee an error of less than 0.00001?
-
If securities markets are efficient, what is the NPV of any security, regardless of risk?
-
According to a recent report by the government, new home construction fell to an 18-month low in October, 2010 (CNNMoney.com, November 17, 2010). Housing starts, or the number of new homes being...
-
The World Federation of Exchanges is the organization that represents major stock exchanges worldwide. Visit the online portal at www.world-exchanges.org and use the annual report of the Federation...
-
The Coca- Cola Company introduced New Coke in 1985. Within three months of this introduction, negative consumer reaction forced Coca-Cola to reintroduce the original formula of Coke as Coca- Cola...
-
A company had the following transactions: Recorded $5000 of utilities expense that will be paid next month. Bought a piece of equipment for $8,000 cash. Recorded $1000 of depreciation expense. Sold...
-
Angus Walker, CFA, is reviewing the defined benefit pension plan of Acme Industries. Based in London, Acme has operations in North America, Japan, and several European countries. Next month, the...
-
Jury Company wants to calculate the component costs in its capital structure. Common stock currently sells for $33, and is expected to pay a dividend of $.40. Jury's dividend growth rate is 8%, and...
-
1. You are a consultant to Pillbriar Company. Pillbriars target capital structure is 36% debt, 14% preferred, and 50% common equity. The interest rate on new debt is 7.8%, the yield on the preferred...
-
Identify similarities and differences among Theory X and Theory Y, the Pygmalion effect, and self-concept.
-
Complete the exercises on the following website. Remember to type your answers in word or excel, screenshot, or phone pic as your work. The site does not save your answers. Upload your work on...
-
There are many management theories that are utilized in organizations. These theories were developed by scholars in the management discipline. One individual was responsible for identifying the major...
-
An increase in the price and a decrease of the quantity of Paclitaxel (an anti-cancer drug) could be caused by which of the following? Select one: O a. an increase in the number of people being...
-
At December 31, 2023, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Category Land Land improvements Buildings Equipment Automobiles and...
-
Assume that the following table represents the sales figures for the five largest firms in the industry. Compute the HHI for the industry (assuming the industry contains just these five firms). Sales...
-
Annual percentage rate What is the APR? How is it calculated, and what is its influence on present and future values?
-
Determine the annual percentage yield for a loan that charges a monthly interest rate of 1.5% and compounds the interest monthly.
-
Refer to Problem 52, Part (c) and assume the IRS approach to allocating normal expenses allowable to all taxpayers is used. Based on these facts, what rental expense deductions are allowable in 2019?
-
What do the following classes of ratios measure? (a) Liquidity ratios. (b) Profitability ratios. (c) Solvency ratios.
-
What is the difference between the current ratio and the acid-test ratio?
-
Donte Company, a retail store, has a receivables turnover of 4.5 times. The industry average is 12.5 times. Does Donte have a collection problem with its receivables?
-
What is the Macaulay duration of a bond with a coupon of 6.6 percent, seven years to maturity, and a current price of $1,069.40? What is the modified duration? (Do not round intermediate...
-
"Tell me something you know today that you did not know yesterday" about 3D Animation Justify by citing 2 or more resources from this course.
-
Warrants exercisable at $20 each to obtain 50,000 shares of common stock were outstanding during a period when the average market price of the common stock was $25. Application of the treasury stock...
Study smarter with the SolutionInn App