FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Estimates of a firm's returns revealed that of the firm was 1.2, and the historical average market risk premium (MRP) over the past 5 years

image text in transcribed
Estimates of a firm's returns revealed that of the firm was 1.2, and the historical average market risk premium (MRP) over the past 5 years has been 10.39%, and the current risk-free rate is 2.01%. What is the expected return of this stock based on the Capital Asset Pricing Model (CAPM). a. 14.48% b. 12.40% c. 12.47% d. 16.89%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Electronic Waste An Actual Gold And Silver Mine

Electronic Waste An Actual Gold And Silver Mine

Authors: Antonio Alcivar

1st Edition

979-8367641059

More Books

Students also viewed these Finance questions

Question

Explain the Important concepts of job analysis.

Answered: 1 week ago

Question

★★★★★
The McKnight Company expects sales in 2015 of 208,000 units of serving trays. McKnights beginning inventory for 2015 is 18,000 trays, and its target ending inventory is 27,000 trays. Compute the...

Answered: 1 week ago

Question

★★★★★
Please explain why. Thank you! Mike Milken failed to consider what type of risk in his analysis of the high yield bond market? The credit risk of high yield bonds. The maturities of high yield bonds....

Answered: 1 week ago

Question

★★★★★
Required information [The following information applies to the questions displayed below.) Population .Size = 10,000 items Book value = $8,000,000 . Tolerable misstatment = $300,000 Sample Size = 100...

Answered: 1 week ago

Question

★★★★★
Assume the following activity times for a process. Activity 1 - 8 minutes Activity 2 - 4 minutes Activity 3 - 1 2 minutes Activity 4 - 5 minutes How long would it take to service 6 5 customers...

Answered: 1 week ago

Question

★★★★★
1. Differentiate between "line management" and "staff management" when dealing with financial decisions. [10 marks] 2. Explain why the process of identifying "cost drivers" must be done carefully for...

Answered: 1 week ago

Question

★★★★★
Professor James has been doing an in-depth study on a new program developed by a local organization. This unique program had been specifically designed for the local community and cannot be...

Answered: 1 week ago

Question

★★★★★
(4) On 20 November 2021 goods were sold to a European customer for 45 million. The customer took control of the goods on that date. On 15 December the customer made a part payment of 10 million and...

Answered: 1 week ago

Question

★★★★★
Find the critical value to for the confidence level c = 0.99 and sample size n = 21. Click the icon to view the t-distribution table. te= (Round to the nearest thousandth as needed.)

Answered: 1 week ago

Question

★★★★★
7. Catalog companies are committed to selling at the prices printed in their catalogs. If a catalog company finds its inventory of sweaters rising, what does that tell you about the demand for...

Answered: 1 week ago

Question

★★★★★
2. The primary reason people immigrate to the United States is: LO25.2 a. To escape political or religious oppression back home. b. To reunite with family members. c. To improve earnings and living...

Answered: 1 week ago

Question

★★★★★
6. True or False. Research indicates that immigration causes large decreases in the average American wage. LO25.3

Answered: 1 week ago

Previous Question Next Question