What is the expected price of the stock?
$12 per share
1.2 Beta
0.04 Risk free rate
Market risk premium 0.08
What is the expected price of the stock? $12 per share 1.2 Beta 0.04 Risk free...
WWF Inc.'s preferred stock pays $12 per share, its beta is 1.2. If the risk-free rate is .04 and the market risk premium is .08, what is the expected price of the stock? Please explain steps, thank you.
Risk-free rate is 4%. The expected market return is 12%. Suppose beta = 1.2. What is the expected return of the stock?
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...
A stock with a beta of 1.2 just paid a dividend of $0.75 that is expected to grow at 7%. If the risk-free rate is 3% and the market risk premium is 5.5%, what should be the price of the stock in five years? A. $28.85 B. $43.29 C. $30.87 D. $40.46
Sheridan Industries common stock has a beta of 1.2. If the market risk-free rate is 5.2 percent and the expected return on the market is 8.2 percent, what is Sheridan’s cost of common stock? I solved this problem incorrectly by doing Kes=Rrf+(Betaesx market risk premium) Kes=0.052+(1.2x0.082) Kes=0.052+0.098400 Kes=0.1504=15.0% I'm not sure what I am doing wrong. Please show full calculation. X Your answer is incorrect. Sheridan Industries common stock has a beta of 1.2. If the market risk-free rate is...
A&Z Corporation's stock has a beta of 1.2. The risk-free rate is 5% and the expected return on the market is 13%. What is the required rate of return on A&Z Corporation's stock using the Capital Asset Pricing Model (CAPM)? Show calculations, please
Q2. Expect that stock in Alpha Air Freight has a beta of 1.2. The market risk premium is 7 percent, and the risk-free rate is 6 percent. Alpha's last dividend was $2 per share, and the dividend is expected to grow at 8 percent indefinitely. a. The stock currently sells for $30. Analyze how it will be Alpha's cost of equity capital.
QUESTION 3 "Assume that Tesla common stock has a Beta of 1.2, the risk-free rate of interest is 3% and the market risk premium is 5%. According to the CAPM, what should be Investors required rate of return for Tesla stock? 9.00% 9.20 % 5.40% 15.20 % 12.60% QUESTION 4 "You expect Caterpillar will pay dividends of 2.25 in one year, 2.50 in two years, and 2.75 in three years. From that point onwards, dividends will grow at 7% per...
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...
please show all work 5. SML A stock is appropriately priced at $40 per share. At this price, the required return is 15% and 15 beta coefficient is 1.2. At this same point in time, the return on the 20-year Treasury is expected to be 3. What is the market risk premium? What should happen to the risk-free rate of return, asset pela coefficient, and required retum on the stock if the market risk premium increases to 12% from an...