Moerdyk Company's stock has a beta of 1.5, the risk-free rate (rRFR) is 4.50%, and the market risk premium (rM- rRFR) is 7.50%. What is the firm's required rate of return?
11.36% |
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15.75% |
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15.95% |
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14.50% |
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13.55% |
Moerdyk Company's stock has a beta of 1.5, the risk-free rate (rRFR) is 4.50%, and the...
Magee Company's stock has a beta of 1.20, the risk-free rate is 4.50%, and the market risk premium is 5.00% What is Magee's required return? a. 10.50% b. 11.25%
Bill Company's stock has a beta of 1.40, the risk-free rate is 4.25 required rate of return? % , and the market risk premium is 6.50 %. What is Bill's 11.36 % 11.65% 11.95% 12.25% 13.35%
Cooley Company's stock has a beta of 0.60, the risk-free rate is 2.25%, and the market risk premium is 5.50%. What is the firm's required rate of return? Do not round your intermediate calculations. 5.55% 4.38% 6.60% 6.16% 4.66%
Lagard's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 1.5%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.)
If the current risk-free rate is 6%; Stock A has a beta of 1.0; Stock B has a beta of 2.0; and the market risk premium, r M – r RF, is positive. Which of the following statements is CORRECT? a. If the risk-free rate increases but the market risk premium stays unchanged, Stock B's required return will increase by more than Stock A's. b. If Stock B's required return is 11%, then the market risk premium is 2.5%. c....
Stock X has a beta of 1.17 If the risk free rate is 2.9 percent and the market risk premium for the average share of stock is 14.50 percent, what is the expected return for Stock X under the Capital Asset Pricing Model assumptions? 20.36% 19.87% 17.89% 18.57%
Question 1: Cooley Company's stock has a beta (b) of 1.28, the risk-free rate (rRF) is 1.25%, and the market risk premium (RPM) is 5.50%. a. What does the beta measure? Give a short answer in 1 sentence. b. What is market risk premium? Give a short answer in 1 sentence. c. Calculate the firm's required rate of return? Show the step-by-step calculation and circle your answer. (Hint: Required return = rRF + b(RPM)) Question 2: Consider the following information...
1. You are analyzing a common stock with a beta of 1.5. The risk-free rate of interest is 5 percent and the expected return on the market is 15 percent. If the stock's return based on its market price is 21.5%, the stock is overvalued since the expected return is above the SML. the stock is undervalued since the expected return is above the SML. the stock is correctly valued since the expected return is above the SML. the stock...
Beta and required rate of return A stock has a required return of 16%; the risk-free rate is 6.5%; and the market risk premium is 6%. What is the stock's beta? Round your answer to two decimal places. 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. If the stock's beta is greater than 1.0, then the change in required rate...
Beta and required rate of return A stock has a required return of 13%; the risk-free rate is 3%; and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. 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. If the stock's beta is equal to 1.0, then the change in required rate...