Conde Nash Inc., is adding a new magazine project to the company portfolio and has the following information: the expected market return is 10%, the risk-free rate is 2%, and the expected return on the new project is 24%. What is the beta of the project?
Conde Nash Inc., is adding a new magazine project to the company portfolio and has the...
Beta of a project. Magellan is adding a project to the company portfolio and has the following information: the expected market return is 14.0%, the risk-free rate is 3.0%, and the expected return on the new project is 18.0%. What is the project's beta?
Beta of a project. Magellan is adding a project to the company portfolio and has the following information: the expected market return is 14.6%, the risk-free rate is 6.7%, and the expected return on the new project is 14.2%. What is the project's beta? What is the project's beta? || (Round to three decimal places.)
Speedy Computers, Inc. is considering a new project that costs $50 million. The project will generate after-tax (year-end) cash flows or $8 million for ten years. The firm has a debt- to-equity ratio of 2/3. The equity beta for Speedy is 1.75. The expected return on the market is 12 percent and the risk- free rate is 4 percent. The cost of debt is 7.5 percent. corporate tax rate is 40 percent. The project has the same risk of the...
5. Joe Jones, Inc. has a beta of .85. The risk-free rate is 5% and the expected rate of return on the market portfolio is 10%. a. Compute the required return for Joe Jones using the security market line (SML) equation. b. What is “beta?” Under what rationale is beta an appropriate measure of risk?
VITnOT CT 3mTA 10-10 Company Risk Premium Paycheck, Inc., has a beta of 0.94. If the mar- ket return is expected to be 11 percent and the risk-free rate is 3 percent, what is Paycheck's risk premium? (LG10-3) 10-11 Portfolio Beta You have a nortfolio with a beta of 1.35. What will be the 10-20 Undervalued/Overvalued Stock A manager believes his firm will earn a 14 percent return next year. His firm has a beta of 1.2, the expected return...
5. Calculate the coefficient of determination (Rsquared) for the above portfolio 6. What does the coefficient of determination tell us? 7. What is the beta of the above portfolio? 8. What is the expected return on ZYX stock given the following: Return on the market 8% Beta 1.3 Treasury bill rate 2.5% 9. What is the expected return on CBA stock given the following: Beta .5 Risk free rate 3.1% Return on the market 15.7% 10. What is the expected...
2) KAYNE Inc. is considering a new project that costs $50 million. The project will generate after-tax (year-end) cash flows of $10 million for the first three years (t = 1, 2, 3), $13 million for the following two years (t = 4, 5), and $12.5 million for the last three years (t= 6, 7, 8). The firm has a debt-equity ratio of 0.50. This firm has a beta of 1.8 and its cost of debt is 10 percent. Suppose...
1. The CFO of MediSearch plc believes that investing into a project which will develop a new drug for fighting the flu virus, promises a long-term annual return of 8%. The expected return of the market index is RM = 17.9%, the volatility of the market index is σM = 9.5%, and the risk-free asset earns Rf = 5.2%. The CFO has studied similar projects of other companies and believes that the covariance between the returns of this project and the...
8-3a Expected Portfolio Returns Calculate the expected return of the portfolio based on the following individual investments and its percentage of the total portfolio. Expected Return Weight -5.4% 10% 3% 23% 3.9% 20% 10% 0% 50% 20% B. 8-3b Portfolio Risk Based on the expected portfolio retums below, te expected return for the portfolio is 5.8% (you can check this). Calculate the standard deviation of the following portfolio: Expected Return Probability 10% 1% 8-3e Beta-Part 1 Returns on technology stocks...
A project under consideration has an internal rate of return of 14% and a beta of 0.6. The risk-free rate is 9%, and the expected rate of return on the market portfolio is 14%. a-1. Calculate the required return. Required return % a-2. Should the project be accepted? Yes No b-1. Calculate the required return if its beta is 1.6. Required return % b-2. Should the project be accepted? Yes ...