![Problem ll. Г4pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at $200 per share. She assumes that that risk-free rate is about 5% and the market risk premium (MRP) is 10%. If she thinks, the stock will rise to $320 per share by the end of the year, what beta would it need to have for this expectation to be consistent with the CAPM? (Show your calculations)](http://img.homeworklib.com/questions/f5e31860-6ff4-11ea-a8f1-cfee82ac195a.png?x-oss-process=image/resize,w_560)
Homework Answers
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
ACCORDING TO CAPM : ke = Rf + beta(Rm-Rf)
Rm-Rf = RISK PREMIUM =10%
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Problem ll. Г4pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at $200...
Problem 11 [4 pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at...
Problem 11 [4 pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at $200 per share. She assumes that that risk-free rate is about 5% and the market risk premium (MRP) is 10%. If she thinks, the stock will rise to $320 per share by the end of the year, what beta would it need to have for this expectation to be consistent with the CAPM? (Show your calculations)
Problem 11. [4 pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at...
Problem 11. [4 pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at $200 per share. She assumes that that risk-free rate is about 5% and the market risk premium (MRP) is 10%. If she thinks, the stock will rise to $320 per share by the end of the year, what beta would it need to have for this expectation to be consistent with the CAPM? (Show your calculations) Problem 12. 4 pts] Taylor Hill wants to...
You are thinking of buying a stock priced at $107 per share. Assume that the risk...
You are thinking of buying a stock priced at $107 per share. Assume that the risk free rate is about 4.3% and the market risk premium is 5.5%. If you think the stock will rise to $117 per share by the end of the year, at which time it will pay a $3.41 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?
You are thinking of buying a stock priced at $104 per share. Assume that the? risk-free...
You are thinking of buying a stock priced at $104 per share. Assume that the? risk-free rate is about 5.2% and the market risk premium is 6.4%. If you think the stock will rise to $123 per share by the end of the? year, at which time it will pay a $3.04 ?dividend, what beta would it need to have for this expectation to be consistent with the? CAPM?
You are thinking of buying a stock priced at $90 per share. Assume that the risk-free...
You are thinking of buying a stock priced at $90 per share. Assume that the risk-free rate is about 4.3% and the market risk premium is 6.1%. If you think the stock will rise to $123 per share by the end of the year, at which time it will pay a $1.86 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is N. (Round to two decimal places.)
Multiple parts, please review each! Quick MC questions, I believe they are all correct but would...
Multiple parts, please review each! Quick MC questions, I
believe they are all correct but would just like to make sure I am
doing them correctly.
You are considering buying shares of Ember Incorporated to add to your portfolio. Your broker tells you that Ember's beta is 1.28 and that the current T-Bill rate is 2.5%. She also estimates that the return on the S&P500 index is 10%. Given this information, calculate the market risk premium". 10% 7.5% 9.6% 12.1%...
Problem 11 [4 pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at $200 per share. She assumes that that risk-free rate is about 5% and the market risk premium (MRP) is 10%. If she thinks, the stock will rise to $320 per share by the end of the year, what beta would it need to have for this expectation to be consistent with the CAPM? (Show your calculations)
Problem 11. [4 pts] Emily DiDonato is thinking of buying Berkshire Hathaway Inc. (BRK-B) priced at $200 per share. She assumes that that risk-free rate is about 5% and the market risk premium (MRP) is 10%. If she thinks, the stock will rise to $320 per share by the end of the year, what beta would it need to have for this expectation to be consistent with the CAPM? (Show your calculations) Problem 12. 4 pts] Taylor Hill wants to...
You are thinking of buying a stock priced at $107 per share. Assume that the risk free rate is about 4.3% and the market risk premium is 5.5%. If you think the stock will rise to $117 per share by the end of the year, at which time it will pay a $3.41 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?
You are thinking of buying a stock priced at $90 per share. Assume that the risk-free rate is about 4.3% and the market risk premium is 6.1%. If you think the stock will rise to $123 per share by the end of the year, at which time it will pay a $1.86 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is N. (Round to two decimal places.)
Multiple parts, please review each! Quick MC questions, I
believe they are all correct but would just like to make sure I am
doing them correctly.
You are considering buying shares of Ember Incorporated to add to your portfolio. Your broker tells you that Ember's beta is 1.28 and that the current T-Bill rate is 2.5%. She also estimates that the return on the S&P500 index is 10%. Given this information, calculate the market risk premium". 10% 7.5% 9.6% 12.1%...
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