Laura Estimates the Stock will yield 9.4%. Company had beta of 0.6. Risk free rate is 3.3%. Expected return on the market is 9.4%. Estimate the alpha if this estimate is accurate.
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Laura Estimates the Stock will yield 9.4%. Company had beta of 0.6. Risk free rate is 3.3%. Expected return on the market is 9.4%. Estimate the alpha if this estimate is accurate.
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- stoch XYZ has an expected return of 12% and risk of Beta=1. stock ABC has expected return of 13% and Beta= 1.5. the market's expected return is 11% and Rf = 5%. according to the CAPM, calculate the expected return of each stock. also draw the SML curve. please show the calculation using excelA firm's stock has a beta of 1.7. The expected T-bill return is 3.7%. and the expected market return is 7%. What cost of equity should the firm use when calculating its WACC?A company's stock has a beta of 1.20, the risk-free rate is 1.6%, and the market risk premium is 16%. What is the firm's required rate of return? Do not round your intermediate calculations.
- The rate of return on the market stock index is 13 percent. The rate of return on a risk-freebank account is 1%. The B (beta) of stock XYZ is 1.5. Use the data to answer the questionsbelow.a. What is the market risk premium? Show your work.b. What is the cost of equity for XYZ? Show your work.c. What is the stock XYZ risk premium? Show your work.d. Draw the graph of the Security Market Line and show the stock of XYZ on the graph.The end-of-year dividend on stock ABC is expected to be $0.8. The growth rate of dividend isexpected to be 5 percent for ever. The current price of the ABC stock is $10. Use the data toanswer the questions below.e. What is the cost of equity for stock ABC? Show your work.f. Suppose stock KLM has the same end-of-year dividend, dividend growth rate andprice as stock ABC, but the risk of KLM stock is much greater than of the ABC stock.What is your estimate of the cost of equity of stock KLM using the method at part e?Do you agree with the valuation of the cost of…The expected return for a stock, calculated using the CAPM is 13.5%. The risk free rate is 7.5% and the beta of the stock is 0.80. Calculate the implied return on the market.Give typing answer with explanation and conclusion The return on the Tarheel Corporation stock is expected to be 14 percent with a standard deviation of 9 percent. The beta of Tarheel is 0.9. The risk-free rate is 6 percent, and the expected return on the market portfolio is 16 percent. What is the probability that an investor in Tarheel will earn a rate of return less than the required rate of return? Assume that returns are normally distributed. Use Table V to answer the question. Round z value in intermediate calculation to two decimal places. Round your answer to the nearest whole number.
- Alpha Company has a beta of 3.25 and a standard deviation of returns of 27%. The return on the market portfolio is 13% and the risk free rate is 5%. What is the risk premium on the market? According to CAPM, what is the required rate of return on stock?Stock A has a beta of 0.2, and investors expect it to return 3%. Stock B has a beta of 1.8, and investors expect it to return 11%. Use the CAPM to calculate the market risk premium and the expected rate of return on the market. (Enter your answers as a whole percent.) Market risk Premium ______% Expected Market Rate of Return _____%AA Corporation's stock has a beta of 1.3. The risk-free rate is 4%, and the expected return on the market is 8%. What is the required rate of return on AA's stock? Do not round intermediate calculations. Round your answer to one decimal place
- JaiLai Cos. stock has a beta of 0.7, the current risk-free rate is 6.1 percent, and the expected return on the market is 11 percent.What is JaiLai’s cost of equity?A stock has an Expected return (Rj) = 10.2%, risk-free rate (RF) = 4.5%, market risk premium = 8.5%. Using CAPM, calculate the beta of the stock.FlavR Company stock has a beta of 2.14, the current risk-free rate is 2.14 percent, and the expected return on the market is 9.14 percent. What is FlavR Company's cost of equity?