The expected rate of stock market return is 10.6% and the risk-free rate is 1.4%. What...
The expected rate of stock market return is 10.6% and the risk-free rate is 1.4%. What is the appropriate cost of capital for a project with Beta = 1.4?
Homework Answers
The solution to the given question is provided below for your reference
cost of capital=1.4%+1.4*(10.6%-1.4%)=14.28%
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The expected rate of stock market return is 10.6% and the risk-free rate is 1.4%. What...
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2. A stock has a beta of 1.15, the expected return on the market is 10.6 percent, and the risk-free rate is 4.5 percent. What must the expected return on this stock be?
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TOISRULIUSS. Expected Return = Risk free Rate + beta (expected market return - risk free rate) .04 +0.80.09 - .04) = .08 = 8.0% 3. Suppose the MiniCD Corporation's common stock has a return of 12%. Assume the risk- free rate is 4%, the expected market return is 9%, and no unsystematic influence affected Mini's return. The beta for MiniCD is:
a. Compute the expected rate of return for Intel common stock, which has a 1.4 beta. The risk-free rate is 3 percent...
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Exchange stocks) has an expected return of 12 percent.
b. Why is the rate you computed the expected rate?
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Project A has a beta of 1.4 and an expected rate of rate of return of...
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A stock has an expected return of 9%. What is its beta? Assume the risk-free rate...
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a. Compute the expected rate of return for Intel common stock,
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minus sign. Round your answer to 2 decimal places.)
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