Pepsi Corporation (PEP) has a beta of 0.62.  If the market return is expected to be 9% and the risk-free rate is 1%, what is Pepsi’s required return?

Q: Suppose that the CAPM holds and that BP’s stock has a beta of 2. If the expected market return is…

A: Required rate of return on stock may ne calculated using CAPM formula as given below   Required rate…

Q: gan's Pumpkins Co. is a distributor of excellent specialty pumpkins. In fact, the firm's…

A: Required rate is rate of return expected by investors from stock and that is based on risk involved…

Q: Suppose Pepsico's stock has a beta of 0.57. If the risk-free rate is 3% and the expected return of…

A: Variables in the question:Beta=0.57Risk free rate(Rf)=3%Expected return of the market portfolio=8%

Q: Nuka Cola has a beta of 0.85. If the risk-free rate of return is 4% and the expected return on  the…

A: Beta = 0.85 Risk free rate of return = 4% Market return = 9%

Q: SkyHi Corp.'s beta is 1.2. The expected market return is 6.4%. The risk-free rate is 3.7%. Find…

A: Capital Asset Pricing Model(CAPM) is used to find out cost of equity or expected return of a risky…

Q: The CRT Co. has a beta of 1.6 The expected market return is 9.5 percent and the risk free rate of…

A: Given that;Expected market return is 9.5%Risk free rate is 3.2%Beta is 1.6

Q: Suppose that Company ABC has a beta of .92.  The expected return on the market is 13% and the market…

A: Market return (Rm) = 0.13Market risk premium (Mp) = 0.102Beta of the stock (b) = 0.92Expected return…

Q: Suppose we estimate SBUX to have β=0.80 when the market premium is 9% and the risk free rate is 3%.…

A: Solution:- Capital Asset Pricing Model (CAPM) is the equity model, which computes required return of…

Q: Hastings Entertainment has a beta of 0.41. If the market return is expected to be 16.90 percent and…

A: As per CAPM model, Required rate of return = Rf + Beta (Rm- Rf) Rm= Market rate of return Rf= Risk…

Q: If the expected rate of return on AZNG is 12.72, its beta is 1.09 and the market risk premium is 8%,…

A: The objective of the question is to find the risk-free rate given the expected rate of return on a…

Q: A company has a beta of  .59. If the market return is expected to be 12.9 percent and the risk-free…

A: To solve the question, we need to use the formula of capital asset pricing model (CAPM), it shows…

Q: Nanometrics, Inc. has a beta of 2.63. If the market return is expected to be 10.10 percent and the…

A: Required return = Risk-free Rate + Beta*(Expected return of market - Risk free rate )

Q: Moerdyk Company's stock has a beta of 1.5, the risk - free rate (rRFR) is 4%, and the market risk…

A: The objective of the question is to calculate the required rate of return for Moerdyk Company's…

Q: Suppose Pepsi Co. has a beta of 0.7, whereas the beta of Microsoft is 1.1. The risk free interest…

A: In this question we need to find expected return of Pepsi Co. and Microsoft According to CAPM.…

Q: the risk free rate is 13% and the market risk premium rM rRF is 4% stock A has a beta of 12, and…

A: Required Rate of Return is the minimum acceptable return on investment sought by individuals or…

Q: Zacher Co.'s stock has a beta of 0.82, the risk-free rate is 4.25%, and the market risk premium is…

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

Q: Consider the CAPM. The risk - free rate is 4%, and the expected return on the market is 15% .…

A: Risk-free Rate, Rf = 4%Beta = 1.2Expected return on market = 15%

Q: Vani Corporation's beta coefficient is equal to 0.7 and the required rate of return on the stock…

A: CAPM is used to determine expected return by an investor considering systematic risk and risk-free…

Q: What is the rate of return for a company if its β is 1.8, risk free rate of return is 17% and the…

A: The rate of return of a company can be calculated using Capital Asset Pricing Model(CAPM).

Q: What is the expected rate of return if the beta is 1.14 and the Rf is 4.2%, Rm is 12%

A: According to Capital asset pricing model ,k = Rf+[b*(Rm-Rf)]wherek= expected rate of returnRf= risk…

Q: Company XYZ has a CAPM beta of 1.5. The expected return on the market is 20% and the risk-free rate…

A: Expected return can be calculated by using CAPM equation given below Expected return =Risk free…

Q: Paycheck, Inc. has a beta of 1.19. If the market return is expected to be 13.50 percent and the…

A: Risk Premium:  It is the investment return amount assets are expected to yield in excess of the…

Q: Kaiser Aluminum has a beta of 0.70. If the risk-free rate (Rer) is 5.0%, and the market risk premium…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: Breckenridge, Inc., has a beta of 0.97. If the expected market return is 12.0 percent and the​…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: Understanding CAPM and beta. Assume the common stock of Starbucks has a beta of 0.61. Also, assume…

A: In this question we need to find expected return on the common stock of starbucks using CAPM: As per…

Q: Crimson Co. has a beta equal to 0.95 and a required return of 0.122 based on the CAPM. If the market…

A: The minimal rate of return that stakeholders or investors anticipate from a project or investment,…

Q: The expected return on Share X is 15.75% while the risk-free rate of return is 7%. If the expected…

A: Expected return =Rf + beta * ( Rm- Rf) Rf = Risk free rate Rm =Expected return on market

Q: Kaiser Aluminum has a beta of 0.70. If the risk-free rate (RRF) is 5.0%, and the market risk premium…

A: The Capital Asset Pricing Model implies the rate of return on any security equals the risk less rate…

Q: Nanometrics, Inc., has a beta of 3.17. If the market return is expected to be 11.35 percent and the…

A: In this question we are given details about nanometrics Inc and we require to calculate the…

Q: You observe the following: ABC Inc. has 1.8 Beta and .2 Expected return ABC Inc. has 1.8 Beta and .2…

A: Given Information ABC Inc. Beta = 1.8 Expected Return of ABC Inc. =0.2 XYZ Inc beta =1.6 Expected…

Q: A firm is considering a project that is expected to have a beta of 1.2. The risk-free rate is 8.3%.…

A: As per CAPM approach required return is equal to risk free rate plus beta times market risk premium…

Q: A new company has a beta of 0.8. Their risk free rate is 4% and the market risk premium is 9%. What…

A: Beta = 0.8 Risk Free Rate = 4% Market Risk Premium = 9%

Q: The rate of return on T-bills is 3.25% and the expected return on the market is 9.50%. J&X, Inc. had…

A: The risk-free rate of return is the ideal rate of return on a risk-free investment. In principle,…

Q: Suppose Pepsico's stock has a beta of 0.74. If the risk-free rate is 2% and the expected return of…

A: CAPM model is capital asset pricing model which helps in calculating cost of capital. It takes into…

Q: Nanometrics, Inc. has a beta of 2.01. If the market return is expected to be 12.50 percent and the…

A: Given information: Beta value is 2.01 Market return is expected to be 12.50% Risk-free rate is 5.00%

Q: Amazon has a beta of 0.6. The risk-free rate is 1.2% and the expected return on the S&P500 is 6%.…

A: If Capital Asset Pricing Model Hold Good, Cost of Equity  = Risk Free Rate  + (Market Rate - Risk…

Q: (CAPM and expected returns) a. Given the following holding-period returns. , compute the average…

A: The capital asset pricing model represents a mode of finance that computes the expected return of an…

Q: The market risk premium for next period is 5.28% and the risk-free rate is 2.55%. Stock Z has a beta…

A: Market risk premium= 5.28%Risk-free rate = 2.55%Stock Z beta = 1.14Expected return = 8.17%

Q: Paycheck, Inc. has a beta of 1.33. If the market return is expected to be 12.70 percent and the…

A: Market return = 12.70%Risk-free rate = 7.70%Beta = 1.33

Q: Q1) UPS, a delivery services company, has a beta of 1.1, and Wal-Mart has a beta of 0.7. The…

A: Note: It is a case where no question is specified to solve among the multiple questions posted, so…

Q: What is the expected market return if the expected return on STC is 20 percent, its beta is 1.5, and…

A: The Capital Asset Pricing Model (CAPM) is a financial model that helps investors understand the…

Q: Hastings Entertainment has a beta of 0.69. If the market return is expected to be 12.10 percent and…

A: Here,Beta is 0.69Market Return is 12.10%Risk Free Eare is 5.10%

Q: Kaiser Aluminum has a beta of 0.70. If the risk-free rate (Rs) is 5.0%, and the market risk premium…

A: The capital asset pricing model is the model of valuing a stock's required rate of return on the…

Q: You looked up the market risk return to be 12%. The risk-free rate of return is 2%, and General…

A: Solution: Given, Market risk return = Market return = Rm = 12% Risk free rate = Rf = 2% Beta = 1.2…