FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- A stock has an expected return of 11.4%, the risk-free rate is 5.5%, and the market risk premium is 11%. What must the beta of this stock be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)arrow_forwardA stock has a beta of 1.3, and a market risk premium of 8%. The risk-free rate is 4%. What is the expected return on the stock? A. 12.0% B. 14.4% C. 10.4% D. 13.2%arrow_forwardA stock's beta is 1.5 and the market risk premium is 5.6%. If the risk-free rate is 2.9%, what is the stock's required return according to CAPM? Answer as a percent and round to 2 decimal places. Answer:arrow_forward
- Assume that the risk-free rate is 2.5% and the required return on the market is 12%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places.arrow_forwardA stock has a required return of 10%; the risk- free rate is 3.5%, and the market risk premium is 4%. a. What is the stock's beta? b. If the market risk premium increased to 10%, what would happen to the stock's required rate of return?arrow_forwardA stock has an expected return of 15.75 percent. The beta of the stock is 1.9 and the risk-free rate is 5 percent. What is the market risk premium?arrow_forward
- Assume that the risk-free rate is 7% and the required return on the market is 9%. What is the required rate of return on a stock with a beta of 0.5? Round your answer to two decimal places.arrow_forwardA stock has a beta of .89 and an expected return of 9.2 percent. If the stock's reward-to-risk ratio is 6.17 percent, what is the risk-free rate?arrow_forwardThe risk-free rate of return is 4.4 percent and the market risk premium is 14 percent. What is the expected rate of return on a stock with a beta of 16?arrow_forward
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