15 Required Return and Stock Value The risk-free rate is 4%, and the expected return on...
AA Corporation’s stock has a beta of 8. The risk-free rate is 4.5% and the expected return on the market is 13.6%. What is the required rate of return on AA’s stock? The market and Stock J have the following probability distributions: Probability rM rJ 0.2 12% 16% 0.3 8 7 0.5 20 13 Calculate the expected rates of return for the market and Stock J. Suppose you manage a $6 million fund that consists of four stocks with...
Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 16%. A share of stock sells for $63 today. It will pay a dividend of $3 per share at the end of the year. Its beta is 1.1. What do investors expect the stock to sell for at the end of the year? Expected Stock Price:
The stock of United Industries has a beta a 2.26 and an expected return of 12.0. The risk-free rate of return is 4 percent. What is the expected return on the market? options: 7.66% 8.69% 8.24% 8.89% 7.54% The expected return on JK stock is 14.00 percent while the expected return on the market is 11.00 percent. The beta of JK stock is 1.5. What is the risk-free rate of return? options: 5.00 percent 3.90 percent 4.90 percent 4.31 percent...
EXPECTED AND REQUIRED RATES OF RETURN Assume that the risk-free rate is 4% and the market risk premium is 6%. What is the required return for the overall stock market? Round your answer to two decimal places. % What is the required rate of return on a stock with a beta of 1.2? Round your answer to two decimal places. %
1 A stock has an expected return of 14.00%. The risk-free rate is 3.62% and the market risk premium is 5.48%. What is the β of the stock? Submit Answer format: Number: Round to: 2 decimal places. unanswered not_submitted #2 The risk-free rate is 1.25% and the market risk premium is 6.59%. A stock with a β of 1.11 just paid a dividend of $1.21. The dividend is expected to grow at 23.06% for three years and then grow at...
eBook Problem 11-06 The risk-free rate of return is 1 percent, and the expected return on the market is 7.1 percent. Stock A has a beta coefficient of 1.4, an earnings and dividend growth rate of 6 percent, and a current dividend of $3.50 a share. Do not round intermediate calculations. Round your answers to the nearest cent. .. What should be the market price of the stock? $ b. If the current market price of the stock is $119.00,...
EVALUATING RISK AND RETURN Stock X has a 10% expected return, a beta coefficienta 0.9. and a 35.0 standard deviation of expected returns. Stock Y has a 12.5% expected return a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. al Calculate each stock's coefficient of variation. Which stock is riskier for a diversified investor? Calculate each stock's required rate of return. d. On the basis of the...
You find a stock with a beta of 1.4 that is expected to pay a dividend of $3.20 and grow that dividend at 5% annually. If the risk-free rate is 3% and the expected market return is 8%, what should be the price of this stock?
Check my work The risk-free rate of return is 4%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 2.0. If the dividend per share expected during the coming year, D4, is $3.30 and g = 5%, at what price should a share sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Share price
GE’s stock had a required return of 15% last year, when the risk-free rate was 4% and the market risk premium was 6%. Then an increase in investor risk aversion caused the market risk premium to rise by 3%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? 24.18% 22.15% 20.50% 18.23% 15.87%