Question
You own $10,000 of Denny's Corp stock that has a beta 2.9. You also own $15,000 of Qwest Communications (beta=1.5) and $5,000 of Southwest Airlines
You own $10,000 of Denny's Corp stock that has a beta 2.9. You also own $15,000 of Qwest Communications (beta=1.5) and $5,000 of Southwest Airlines (beta=0.7). Assume that the market return will be 11.5 percent and the risk-free rate is 4.5 percent.
What is the market risk premium%??
What is the risk premium of each stock?? (Round your answers to 2 decimal places.)
Denny's risk premium%
Qwest's risk premium%
Southwest Airline's risk premium%
What is the risk premium of the portfolio? (Do not round intermediate and round your final answer to 2 decimal places.)
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
