market risk premium=market rate-risk free rate
Market rate=(3.5+4)=7.5%
Required return=risk free rate+beta*(market rate-risk free rate)
=3.5+0.8*(7.5-3.5)
=6.7%
8-4 on the market is 12%. What is the required rate of return on a stock...
Problem 8-4 Expected and required rates of return Assume that the risk-free rate is 5% and the market risk premium is 8%. a. What is the required return for the overall stock market? Round your answer to two decimal places. b. What is the required rate of return on ㄺ stock with beta of 2.2? Round your answer to two decimal places.
EXPECTED AND REQUIRED RATES OF RETURN Assume that the risk-free rate is 5% and the market risk premium is 6%. What is the required return for the overall stock market? What is the required rate of return on a stock with a beta of 1.2?
please answer all parts 1)Assume that the risk-free rate is 5.5% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 3? Round your answer to two decimal places. _____% 2)Assume that the risk-free rate is 3.5% and the market risk premium is 5%. What is the required return for the overall stock market? Round your answer to one decimal place. ______% 3)What is the required rate...
EXPECTED AND REQUIRED RATES OF RETURN Assume that the risk-free rate is 4% and the market risk premium is 6%. What is the required return for the overall stock market? Round your answer to two decimal places. % What is the required rate of return on a stock with a beta of 1.2? Round your answer to two decimal places. %
Problem 8-5 Beta and required rate of return A stock has a required return of 12%; the risk-free rate is 6%; and the market risk premium is 4%. a. What is the stock's beta? Round your answer to two decimal places. b. If the market risk premium increased to 10%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. I. If the stock's beta is less than 1.0, then...
Problem 8-4 Expected and required rates of return Assume that the risk-free rate is 6% and the market risk premium is 6%. a. What is the required return for the overall stock market? Round your answer to two decimal places. b. What is the required rate of return on a stock with a beta of 2.4? Round your answer to two decimal places. %
8-5 BETA AND REQUIRED RATE OF RETURN A stock has a required return of 9%, the risk-free rate is 4.5%, and the market risk premium is 3%. What is the stock's beta? а. If the market risk premium increased to 5%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. b.
5. Green corp's required rate of return is 12% and beta is 1.3. What is the required rate of return of Blue corp if its beta is.8 and market risk free return is 4.75%? 6. Mack Motors has a beta of 1.1. Real risk free return is 2%, expected inflation is 3%, and market risk premium if 4.7%. What is Mack's required rate of return? 7. Brook industries' stock return is 11.75% and beta is 1.23. What is the market...
Expected and required rates of return Assume that the risk-free rate is 2.5% and the market risk premium is 6%. What is the required return for the overall stock market? Round your answer to two decimal places. What is the required rate of return on a stock with a beta of 0.6? Round your answer to two decimal places.
Stock A has a market beta of 0.8 and a required rate of return of 6%. The return on the overall stock market is 7%. [Show the work leading to your answers] a. Determine the risk-free rate, rRF. b. Assume that the overall market return increases to 10% and that Stock A’s beta and the riskfree rate remain unchanged. What is Stock A’s new required return after the change in the market return? c. The overall market return remains at...