The market risk premium is 8.4% and the risk-free rate is 2.3%. The beta of the...
The market risk premium is 8.4% and the risk-free rate is 2.3%. The beta of the stock is 1.22. What is the required return of the stock? Enter you answer as a percentage. Do not include a percent sign in your answer. Enter your answer rounded to 2 DECIMAL PLACES.
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Homework Answers
Required return of the stock = Risk-free rate + Beta(Market risk premium)
Required return of the stock = 2.3% + 1.22(8.4%)
Required return of the stock = 12.55%
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The market risk premium is 8.4% and the risk-free rate is 2.3%.
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8.4
Assume that the risk-free rate is 6.5% and the market risk premium is 3%. What is the required return for the overall stock market? Round your answer to one decimal place. What is the required rate of return on a stock with a beta of 0.8? Round your answer to one decimal place. %
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8.4
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