a. Given the following holding-period returns, compute the average returns and the standard deviations for the Zemin Corporation and for the market. b. If Zemin's beta is 1.98 and the risk-free rate is 7 percent, what would be an expected return for an investor owning Zemin? (Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk-free rate. For simplicity, you can convert from monthly to...
a. Given the following holding period returns, compute the average returns and the standard deviations for the Zen Corporation and for the market b. Zomb is 106 and ther e is 7 percent we would be an expected return for an investor o m Because the precedings are based on m to make them comprate with skrerateFor simplicity you can convert from m y to your by gyng e rgement returns by 12) C. How does Zem's historical average retum...
(CAPM and expected returns) a Given the following holding period retums, mh compute the average rums and the standad deviations for the Zemin Coporation and for the market b. If Zemin's beta is 1.32 and the risk-free rate is 7 percent, what would be an expected returs for an investor owning Zemin? (Note Because the precedng retus are based on montly daa, you wil reod to avuaire the retums to make them comparable with the risk-fhee rate. For smplicity, ycan...
(Related to Checkpoint 8.3) (CAPM and expected returns) a. Given the following holding-period retuns, EB, compute the averace returns and the standard deviations for the Sugita Corporation and for the market. f Sugita's beta is 1.46 and the risk-free rate is 9 percent, what would be an expected return for an investor owning Sugita? (Note: Because the preceding returns a them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average...
qABC Corp has a stock price of $20.The risk free rate in the market is 2%.The Market Risk Premium over the risk free rate for owning stocks is 4%.The beta of ABC Corp vs the market is 1.3. Using the CAPM model calculate the cost of Equity capital for ABC corp ?
ABC Corp has a stock price of $20.The risk free rate in the market is 20%.The Market Risk Premuim over the riskfree rate for owning stocks is 4%..The beta of ABC Corp is the 1.3. Using CAPM model, calculate the cost of common equity for ABC Corp?
1. Last year, Ahmed corp. issued 10-year 5% coupon bonds with face value of $500 each. If then market rate for Ahmed's risk class was 6%, how much money did the firm raise from each bond? 2. Wheeler bought 1000 of these bonds last year. This year interests drops by 2%. If Wheeler decides to sell these bonds now, how much money will he make in capital gain (or loss)? 3. Profit corp. analysts estimated the following probability distributions for...
Turner corp. stocks had a required rate of return of 8%. Risk free rate was 3% and market risk premium was 6 %. Analysts are expecting an increase in investor risk aversion increasing market risk premium by 2 %. What will be the firm's new required rate of return?
3. Profit corp. analysts estimated the following probability distributions for its stocks. What is their expected rate of return? State of Economy Stock return Prob. of state occurring Recession Normal Boom -5% 5% 15% 4. Turner corp. stocks had a required rate of return of 8%. Risk free rate was 3% and market risk premium was 6%. Analysts are expecting an increase in investor risk aversion increasing market risk premium by 2%. What will be the firm's new required rate...
you need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns. What was XYZ's average historical return? Complete the market's and XYZ's excess returns for each year. Estimate XYZ's beta. Estimate XYZ's historical alpha. Suppose the current risk free rate is 4% and you expect the market return to be 7%. Use CAPM to estimate an expected return for XYZ Corp stock. Would you base your estimate of XYZ's equity...