lory Tech Corporation's stock has a required return of 13.00 %, the risk- free rate is 5.00%, and the market risk premium is 5.00% . Now suppose there is a shift in investor risk aversion, and the market risk premium increases by 100 basis points or 1.00% . What is Glory's new required return? 1 % equals 100 basis points. a. 14.00% b. 14.30 % c. 14.60% d. 15.10% e. 17.40%
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lory Tech Corporation's stock has a required return of 13.00 %, the risk- free rate is 5.00%, and the market risk premium is 5.00% . Now suppose there is a shift in investor risk aversion, and the market risk premium increases by 100 basis points or 1.00% . What is Glory's new required return? 1 % equals 100 basis points. a. 14.00% b. 14.30 % c. 14.60% d. 15.10% e. 17.40%
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- Dhofar Energy Services has a Beta = 1 The risk-free rate on a treasury bill is currently 4.4% and the cost of equity has 20.70%. What is the market return? Select one: a. 1.1630 b. 0.2070 c. 0.2480 d. 0.2070 e. All the given choices are not correctAssume that the risk-free rate of return is 4% and the market risk premium (i.e., Rm - Rf) is 8%. If use the Capital Asset Pricing Model (CAPM) to estimate the expected rate of return on a stock with a beta of 1.28, then this stock's expected return should be -- A) 10.53% B) 14.24% 23.15% 6.59%Company A has a beta of 0.70, while Company B's beta is 0.95. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return? Select the correct answer. a. 1.61% b. 1.63% c. 1.65% d. 1.67% e. 1.69%
- Dhofar Energy Services has a Beta = 0.93 The risk - free rate on a treasury bill is currently 4.4% and the cost of equity has 20.70%. What is the market return? Select one: a. 0.2193 b. 0.2634 c. 0.2039 d. 1.1753 e. All the given choices are not correctShrek Corporation's stock has a required return of 11.00%, the risk-free rate is 3.00%, and the market risk premium is 4.00%. Now suppose there is a shift in investor risk aversion, and the market risk premium increases by 2% (risk-free rate stays the same). What is Shrek's new required return? 16% 15% 13% 14%What is the beta of a firm whose equity has an expected return of 21.3 percent when the risk-free rate of return is 7.0 percent and the expected return on the market is 18.0 percent? Select one: O a. None of these O b. 0.79 С. 1.30 O d. 1.57
- The 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. 22For an investment in a stock, the probability of the return being -10.0% is 0.3, 10.0% is 0.4, and 30.0% is 0.3. Given the probability distributions, what is the expected rate of return for the investment?Choices:A. 10.00%B. 9.50%C. 15.00%D. 12.50%E. 13.00%Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 10.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.) Select the correct answer. a. 8.93% b. 8.69% c. 8.77% d. 8.85% e. 9.01%
- the risk free rate is 3% and the market premium rM rRF is 4%. stock A has a beta of 1.2, and stock B has a beta of 0.8. what is the required rate of return on each stock? assume that investors become less willing to take risk (i.e, they become more risk averse), so the market risk premium rises from 4% to 6%. Assume that the risk free rate remains constant. what effect will this have on the required rates of return on the two stocks?2- Assume that the market has an expected return of 12% and volatility (standard deviation) of 20%. Company X has a 50% volatility (standard deviation). The correlation between the market and Company X is 90%. The risk-free rate is 3%. What would be the expected return on Company X? (Hint: You have to check my lecture note (Lecture Note #10b - Risk and Return: Capital Asset Pricing Model (CAPM)) 23% O 23,25% 23,50% 23,75% Diğer:Zacher Co.'s stock has a beta of 1.50, 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. 12.10% b. 12.90% c. 12.50% d. 13.30% e. 13.70%