Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 8.50%, and the risk-free rate is 4.30%. What is the required
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- Nonearrow_forwardonly typed answer Stock A's stock has a beta of 1.30, and its required return is 15.25%. Stock B's beta is 0.80. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.) Select the correct answer. a. 11.15% b. 11.18% c. 11.21% d. 11.24% e. 11.27%arrow_forwardZacher Co.'s stock has a beta of 1.28, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's required rate of return? Select the correct answer. a. 10.09% b. 10.49% c. 11.29% d. 10.89% e. 11.69%arrow_forward
- Questionarrow_forwardThe risk-free rate is 4%. The market risk-premium is 7%. The beta is 20. What is the expected rate of return on this stock? Answers: A.10% B12% C.18% D.20% E. 22arrow_forwardYou want to estimate the cost of equity of firm A using CAPM. Firm A has a beta of 1.3. Assume that the return on the market portfolio is 8.52%, and the risk-free rate is 3%. What is the cost of equity of firm A? Group of answer choices There is not enough information to answer this question. 10.17% 11.74% 14.21% 12.11%arrow_forward
- Required Rate of Return Stock R has a beta of 1.3, Stock S has a beta of 0.75, the expected rate of return on an average stock is 9%, and the risk-free rate is 5%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.arrow_forwardPai lnc's stock has an expected return of 16.25%, a beta of 1.39, and is in equilibrium. If the risk-free rate is 2.8%, what is the market risk premium? A. 10.84% B. 9.68% C. 7.47% D. 11.32% E. 8.29%arrow_forwardRequired Rate of Return Stock R has a beta of 1.4, Stock S has a beta of 0.45, the expected rate of return on an average stock is 11%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places. %arrow_forward
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