Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 10, 2023

The beta of Wal-Mart is 0.65, the risk-free rate is 4 percent.The expected market risk premium is 14 percent. Calculate the expected rate of return

The beta of Wal-Mart is 0.65, the risk-free rate is 4 percent.The expected market risk premium is 14 percent.

Calculate the expected rate of return on this company.

Step by Step Solution

★★★★★

3.41 Rating (151 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the expected rate of return on a company using the Capital Asset Pricing Model CAP... 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

Step: 3

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

Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective

Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw

7th Edition

9780324789423, 324789416, 978-0324789416

More Books

Students also viewed these Finance questions

Question

★★★★★

This case study on project evaluation is applicable for beginning courses in corporate finance or finance strategy. Two alternative investment options are available to evaluate. Challenges are...

Answered: 1 week ago

Question

★★★★★

In general, students are expected to meet the following objectives: 1) To ascertain cost of capital for a new project by using cost of capital of existing firms operating in the same business. (2)...

Answered: 1 week ago

Question

★★★★★

During the 2015-16 period, Larry Energeria Ltd acquired a patent for heating glazing unit, as well as incurring expenses in relation to the development of a new power generation brick that it expects...

Answered: 1 week ago

Question

★★★★★

Consider the following table, which gives the running time T(n) in seconds for a program for various values of the input size n: a. What is the value of T(n) if n = 160007 10240 5120 40960 20480 B C...

Answered: 1 week ago

Question

★★★★★

What arguments may be used against the lower of cost or market rule?

Answered: 1 week ago

Question

★★★★★

This project demonstrates how Excel can be used to create a variety of useful documents for small businesses. a. Read the article A Do-It-Yourself Automated Invoicing System, by Jacob M. Rose, which...

Answered: 1 week ago

Question

★★★★★

What is the biggest strength of the program?

Answered: 1 week ago

Question

★★★★★

There are some 200 economic integration agreements in effect around the world already, far more than even a few years ago. Virtually every country is now party to one or more free trade agreements....

Answered: 1 week ago

Question

★★★★★

On January 1. Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano's shares...

Answered: 1 week ago

Question

★★★★★

The annual returns on U.S. corporate stock and U.S. Treasury bonds over the next 12 months are uncertain. Suppose that these returns can be described by normal distributions with U.S. corporate stock...

Answered: 1 week ago

Question

★★★★★

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 34,000 Rets per year. Costs associated with this level of production and...

Answered: 1 week ago

Question

★★★★★

The photograph below shows the interference of two water waves produced by two coherent sources operating at the same frequency and in phase. The waves travel outward at a constant speed from the two...

Answered: 1 week ago

Question

★★★★★

The majority of information needed to answer these can be found through our website. However, in cases where it isn't, please use your imagination and creativity to come up with a personally tailored...

Answered: 1 week ago

Question

★★★★★

Mary Kate is an intern with a minor league baseball team. She says, I report to two managers: the director of marketing and the director of community relations. From time to time, the director of...

Answered: 1 week ago

Question

★★★★★

How can healthcare practitioners actively incorporate the principle of treating individuals like human beings into their daily interactions with patients from diverse backgrounds? Share examples of...

Answered: 1 week ago

Question

★★★★★

Megan is a single taxpayer. Her salary is $45,000. Megan realized a short-term capital loss of $6,500. Her itemized deductions total $1,500. (The tax year is 2023.) View the standard deduction...

Answered: 1 week ago

Question

★★★★★

Antuan Company set the following standard costs for one unit of its product. Direct materials (4.8 Ibs. $5.80 per Ib.) Direct labor (1.7 hrs. $13.80 per hr.) Overhead (1.7 hrs. $18.50 per hr.) Total...

Answered: 1 week ago

Question

★★★★★

What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used?

Answered: 1 week ago

Question

★★★★★

Exhibit 5.20 presents selected financial data for Best Buy and Circuit City for fiscal 2008 and 2007. Best Buy and Circuit City operate as specialty retailers offering a wide range of consumer...

Answered: 1 week ago

Question

★★★★★

A recent article in Fortune magazine listed the following firms among the top ten most admired companies in the United States: Dell, Southwest Airlines, Microsoft, and Johnson & Johnson. Access the...

Answered: 1 week ago

Question

★★★★★

The concept of earnings quality has several dimensions, but two characteristics often dominate: the accounting information should be a fair representation of performance for the reporting period, and...

Answered: 1 week ago

Question

★★★★★

What is meant by the term lead time service leave Generally speaking, how is lead time service level related to the amount of safety' stock held?

Answered: 1 week ago

Question

★★★★★

What are some ways that a company can reduce its needs for inventories?

Answered: 1 week ago

Question

★★★★★

Question What are the advantages and disadvantages of opening up a Louisville warehouse/distribution centre versus shipping via courier from Halifax (within 20 km of Bedford)? In the late 1990s,...

Answered: 1 week ago

Previous Question Next Question