A manager believes his firm will earn a return of 20.30 percent next year. His firm has a beta of 1.36, the expected return on the market is 15.90 percent, and the risk-free rate is 5.90 percent.   Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.)     Required return   %

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A: The question is related to the Portfolio Management. The required rate of return is calculated with…

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A: CAPM is capital asset pricing model, which is used for calculation of required return on the stock…

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A: As per CAPM model, Required rate of return = Rf + Beta (Rm- Rf) Rm= Market rate of return Rf= Risk…

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Q: Nanometrics, Inc. has a beta of 2.63. If the market return is expected to be 10.10 percent and the…

A: Required return = Risk-free Rate + Beta*(Expected return of market - Risk free rate )

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A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

Q: Consider the CAPM. The risk - free rate is 4%, and the expected return on the market is 15% .…

A: Risk-free Rate, Rf = 4%Beta = 1.2Expected return on market = 15%

Q: Beta of a project. Magellan is adding a project to the company portfolio and has the following…

A: Expected return (Er) = 13.3% Market return (Rm) = 10.6% Risk free rate (Rf) = 2.4% Project beta = B

Q: the required rate of Enterprises assuming that inv ors expect a 3. riation in the ture. The real…

A: In this we have to calculate the required rate by CAPM formula.

Q: Suppose the economy could be either strong or weak next year, each with a 50% probability. In a…

A: Probability of a strong economy = 50%Probability of a weak economy = 50%Stock S return in a strong…

Q: Company XYZ has a CAPM beta of 1.5. The expected return on the market is 20% and the risk-free rate…

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A: EXPECTED RETURN FORMULA: EXPECTED RETURN =∑n pn×rnwhere,n=scenariopn=probabilityrn= return

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A: As per CAPM, Expected Return = Risk free rate + beta *(market return - risk free rate)

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Q: ave $375,000 in​ cash, and you decide to borrow another $63,750 at a 7% interest rate to invest in…

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Q: Compute Bowling Avenue Inc.'s required rate of return given a beta of.9, risk free rate of 3.25%,…

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Q: B Bhupatbhai

A: The objective of the question is to calculate the value of Lauryn's Doll Co. using the Free Cash…

Q: te the required rate of return for Mudd Enterprises assuming that investors expect a 4.3% rate of…

A: Required rate of return depends on risk of the stock that is given by the beta of stock and it also…

Q: Hastings Entertainment has a beta of 0.69. If the market return is expected to be 12.10 percent and…

A: Here,Beta is 0.69Market Return is 12.10%Risk Free Eare is 5.10%

Q: You looked up the market risk return to be 12%. The risk-free rate of return is 2%, and General…

A: Solution: Given, Market risk return = Market return = Rm = 12% Risk free rate = Rf = 2% Beta = 1.2…

Q: Jensen Corp. has an expected excess return of 3% for the coming year. The company's beta is 0.8 and…

A: Step 1 A financial model used to determine an asset's expected rate of return is known as the…

Q: CAPM Required Return A company has a beta of 1.14. If the market return is expected to be 11.9…

A: Formula: Required rate of return = Risk free rate + [Beta X (Market Rate – Risk free rate)]

Q: You are a consultant to a firm evaluating an expansion of its current business. The cash-flow…

A: Calculation of net present value of the project: Answer: Net present value of the project is -$10.07

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Q: Consider an economy with two types of firms, S and I. S firms always move together, but I firms move…

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Q: Please show all work and formulas in excel please! The Table for the problem is attached.  Table…

A: Expected Return: The anticipated gain or loss from an investment, calculated as the weighted average…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.