Expected return = Risk-free rate + Beta(Market return - Risk-free rate)
Expected return = 0.06 + 0.756(0.125 - 0.06)
Expected return = 0.1091 or 10.91%
(Capital Asset Pricing Model) CSB, Inc. has a beta of 0.756. If the expected market return...
Calculate Expected return for stock H,T,P,W (Capital asset pricing model) Anita, Inc. is considering the following investments. The current rate on Treasury bills is 6 percent, and the expected return for the market is 12.5 percent. Using the CAPM, what rates of return should Anita require for each individual security? Stock Beta Н 0.78 1.79 T 0.97 1.31 W %. (Round to two decimal places.) a. The expected rate of return for security H, which has a beta of 0.78,...
For AT&T Inc. 2018. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Expected Rate of Return = Risk-Free Rate + Beta(Market Return – Risk Free Rate) Use 7.5% for an average expected market rate of return Use 3% as an average risk-free rate (10 year composite rate of T-bill) Find the beta of your company’s stock with other financial data on Yahoo Finance or MarketWatch....
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Risk-free rate, RF 10% Market return, om 15% Beta, b 0.5 The required return for the asset is % (Round to two decimal places.)
(Capital asset pricing model) Levine Manufacturing Inc. in considering several investments in the popup window In The rate on Tremur bite currently 6.0 percent, and the expected return for the market is 118 percent. What should be the required rate of rotum for each Investment using the CAPMYO a. Using the CAPM the required rate of return for security AI IX (Round to two decimal places) b. Using the CAPM, the required rate of return for security Bit Round to...
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon located on the top-r spreadsheet) Risk free Market rate, R. Beta, 2% 7% 0.9 O retur, The required retum for the set is % (Round to two decimal places)
Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a. Find the required return for an asset with a beta of 1.18 when the risk-free rate and market return are 5% and 8%, respectively. b. Find the risk-free rate for a firm with a required return of 13.117% and a beta of 1.51 when the market return is 12%. c. Find the market return for an asset with a...
Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems a. Find the required return for an asset with a beta of 1.04 when the risk free rate and market return are 4% and 9%, respectively b. Find the risk-free rate for a firm with a required return of 7 530% and a beta of 0.39 when the market return is 10% C. Find the market return for an asset...
Problem 6-22 (similar to) Question Help (Capital asset pricing model) The expected retum for the general market is 154 percent, and the risk premium in the market is 8.7 percent. Tasaco, LBM, and Exocos have betas of 0.809, 0.691, and 0.542, respectively. What are the corresponding required rates of return for the three securities? a. Using the CAPM, the corresponding required rate of return for Tasaco is 13.74 % (Round to two decimal places) b. Using the CAPM, the corresponding...
A stock has a beta of 0.8. Using the Capital Asset Pricing Model what is the expected return of the stock if the risk-free rate is 4% and the expected risk premium on the market is 8%?
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the requied returm, (Click on the icon located on the top-ight comer of the data table below in order to copy its contents into a spreadsheet.) Risk-free rate, RF 8% Market return, m 16% Beta, b The required return for the asset is (Round to two decimal places) Enter your answer in the answer box 2 12/2/2018