Question: A stock was selling for $ 2 0 per share a year ago. During the year, it paid no dividend. At the end of the

A stock was selling for $20 per share a year ago. During the year, it paid no dividend. At the end of the year, its price dropped to $18. First, compute the percentage return on the stock. T-Bills returned 5% over the same period.
What was the risk premium on the stock? %
Remember to state %, not fraction.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Yarmouth Corp. just reported net income of $2,450,000 on sales of $21,400,000 and has 700,000 shares of stock outstanding. The stock is currently trading at $40.00 per share. Last year, the company...

Q:

2. The stock price for stock cox& KING was OMR 102 per share one year ago. The stock is currently trading at OMR 96 per share. Shareholders just received OMR 4 dividend per share. What percentage...

Q:

Cost of Capital (WACC): 1. Company XYZs financing plans for next year include the sale of bonds with a 10% coupon rate. The company believes it can sell the bonds at a price that will provide a yield...

Q:

You purchased 1 1 8 shares of stock in Happy Company for $ 4 7 per share one year ago. You just sold your shares for $ 5 8 per share. You paid a 2 % commission on each transaction. You also received...

Q:

You purchased 117 shares of stock in Happy Company for $47 per share one year ago. You just sold your shares for $58 per share. You paid a 2% commission on each transaction. You also received a $1.75...

Q:

You purchased 1 0 7 shares of stock in Happy Company for $ 4 5 per share one year ago. You just sold your shares for $ 5 6 per share. You paid a 2 % commission on each transaction. You also received...

Q:

Cost of Capital (WACC): 1, Company XYZ's financing plans for next year include the sale of bonds with a 10% coupon rate. The company believes it can sell the bonds yield to maturity (YTM) of 12%. If...

Q:

Please show me all Calculate process I. Company XYZ's financing plans for next year include the sale of bonds with a 10% coupon rate. The company believes it can sell the bonds at a price that will...

Q:

if i can please have the answers in the excel form where they go in the pictures, that be terrific and appreciated. BTW. . .A. Merge Center - $ - % 848 Conditional Format as Cell Formatting Table...

Q:

Question 1 Wrigley Company is considering an investment project that generates a cash flow of $13,000 next year if the economy is favorable but generates only $6,000 if the economy is unfavorable....

Q:

Various sources provide different earthquake data, but assume that for a recent 41-year period in the United States, there were 268 earthquakes measured at 6.0 or higher on the Richter scale (based...

Q:

Question 1. Name five main questions you should ask yourself to determine whether a source that you may use in your secondary research assignment is reliable? Be specific. Explain shortly what you...

Q:

How does this code work, after th if statement are the nodes pointing to the same value? prev.next = curr.next; curr = prev.next;

Q:

10) For a bond that pays cash interest (i.e., not a zero coupon bond), YTM is (a) always equal to the coupon rate (b) always equal to the current yield (c) is always less than the coupon rate (d) can...

Q:

5. What advice might Hayward take from Drucker (cited toward the beginning of this chapter) to improve his success in the future?

Q:

5. What decisions would a city manager at the postconventional level be expected to make?

Q:

3. What decisions would a city manager at the conventional level be expected to make?