Beale Manufacturing Company has a beta of 1.1, andFoley Industries has a beta of 0.30. The required return on an index fund that holds theentire stock market is 11%. The risk-free rate of interest is 4.5%. By how much does Beale’srequired return exceed Foley’s required return?

Q: Beale Manufacturing Company has a beta of 1.9, and Foley Industries has a beta of 0.3. The required…

A: CAPME(ri) = Rf  + Bi * (E(Rm) - Rf)E(ri) = Expected returnRf = Risk free rateBi = BetaE(Rm) =…

Q: expected

A: Introduction: Capital asset pricing model or CAPM as it is known widely is a tool which helps in…

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A: In this question we require to calculate the required return for Beale Manufacturing Company and…

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A: Required rate of return = Risk free rate + beta * market risk premium

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A: Risk premium = Beta(market return - risk free rate)

Q: Suppose kraft Foods’ stock has a beta of 0.50, whereas Boeing’s beta is 1.25. If the risk –free rate…

A: Risk free rate (Rf) = 0.04 Market return (Rm) = 0.10   Expected return = ?

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A: The provided information are: Beta = 0.80 Expected return = 12% Risk free rate = 6.2%

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A: Capital Asset Pricing Model (CAPM) is a financial approach that helps to determine the expected…

Q: Cooley Company's stock has a beta of 0.8 , the risk-free rate is 1.04 %, and the market risk premium…

A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets…

Q: Beale Manufacturing Company has a beta of 1.5, and Foley Industries has a beta of 0.30. The required…

A: Calculation of required return: = Risk free rate + Beta (Market rate - Risk free rate)

Q: Cooley Computer Repair and Service Company's stock has a beta of 1.28, the risk-free rate is 2.25%,…

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A: Return is the basic factor which affects the investor’s decision. CAPM is the tool which is used to…

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A: Market risk premium= Rm-Rfwhere,Rm= market returnRf= Risk-free rate

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A: Investors have different options to make investments, and the motive behind investments is to…

Q: Suppose intel stock has a beta of 0.80, whereas Boeing stock has a beta of 1.15. If the risk-free…

A: Intel Beta = ib = 0.89 Boeing Beta = bb = 1.15 Risk free rate = rf = 3.1% Market return = rm = 10.1%

Q: Beale Manufacturing Company has a beta of 1.8, and Foley Industries has a beta of 0.60. The required…

A: Beale's beta = 1.8Foley's beta = 0.60Risk-free rate = 3.5%Market rate = 11%

Q: What is the expected return on Verdoni’s stock?

A: The expected return is the return expected by the investors on their investment. It is the…

Q: The expected rate of return on a market portfolio is 7 percent. The riskless rate of interest is 4…

A: required rate of return = risk free rate + beta * (market return less risk free rate)

Q: If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert…

A: The term beta of a stock represents the responsiveness of a particular stock in relation to the…

Q: JaiLai Cos. stock has a beta of 0.7, the current risk-free rate is 6.1 percent, and the expected…

A: CAPM model provides formula that calculates the expected return on stock based on its level of risk.…

Q: Porter's Inc.'s stock has an expexted return of 12.5%, a beta of 1.25, and is in equilibrium. If the…

A: Following details are given in the question for Porter's Inc Stock: Expected Return = 12.5% Beta =…

Q: Beale Manufacturing Company has a beta of 1.2, and Foley Industries has a beta of 0.50. The required…

A: Solution: Required Return = Rf + Beta(Rm-Rf) Return for Beale = 4.5% + 1.2(9% - 4.5%) = 4.5% +…

Q: Mulherin's stock has a beta of 1.34, its required return is 8.33%, and the risk-free rate is 2.30%.…

A: Beta = b = 1.34Required Return = r = 8.33%Risk free rate = rf = 2.30%

Q: Suppose the risk-free return is 5.3% and the market portfolio has an expected return of 10.2% and a…

A: We need to use CAPM model to calculate expected rate of return. Expected return =Risk free…

Q: Diddy corp. has a beta of 1.3. The current risk-free rate is 3 percent and the expected return on…

A: Following details are given in the question for Diddy corp. : Beta of Stock = 1.3 Risk free rate =…

Q: Consolidated Industries has a required return of 17.5 percent. The return on the market is 9 percent…

A: Given the following:  Required Return = 17.5%  Market Return = 9%  Risk Free Rate = 2%

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A: Financial management consists of directing, planning, organizing and controlling of financial…

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A: We will have to apply the CAPM model here. CAPM is the capital asset pricing model.

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A: Shares are valued using a method called the dividend discount model. This model is based on the…

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A: The capital assets pricing model is a technique that helps to compute the required rate of return on…

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A: Here, Risk Free Rate is 3.16% Beta is 1.66 Expected Return on the Market is 10.66%

Q: Cooley Company's stock has a beta of 1.05, the risk-free rate is 2%, and the market risk premium is…

A: Required rate of return = CAPM = Risk free rate  + Market risk premium * beta