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 beta (b) of .78. What is the required return (r) for J&X?

Q: a. Given the following holding-period returns, compute the average returns and the standard…

A: a. Formula used:

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A: Ratios are very important in valuation of company and the stock and comparing the companies.

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A: The mean return on equity refers to the weighted average return on equity. The return on bonds is…

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

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

A: Systematic risk is the risk of the market volatility,  Systematic risk affects entire  market not…

Q: m expects EPS of $1.50 for the end of period and expect to mantain a dividend payout ratio of 60%.…

A: In this we have to determine the price of equity from P/E ratio and than calculate growth rate and…

Q: The market risk premium is 5%. The firm has an estimated beta of 0.9 and the current risk free rate…

A: Given Information : Market risk premium = 5%Beta = 0.9 Risk free rate = 3%

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: a. Given the following holding-period returns, compute the average returns and the standard…

A: Here, MonthS CorpMarket12%1%2-1%2%3-1%2%41%1%56%5%66%1%

Q: Use the following information to answer the question(s) below. Year 2007 2008 2009 Risk-free Return…

A: YearRisk-Free ReturnMarket ReturnWyatt Oil…

Q: The market capitalization rate for Admiral Motors Company is 7%. Its expected ROE is 12% and its…

A: market capitalization rate = r = 7%Return on Equity = ROE = 12%Earning Per Share = EPS = $6plowback…

Q: If risk free rate is 2%, market risk premium (also called the equity risk premium) is 5%, and a…

A: Cost of equity is the cost in percentage that is used to raise the company’s equity funds.

Q: You have the following initial information on which to base your calculations and discussion:…

A: If there is no component of debt in firm’s capital, it is known as unlevered capital. But when the…

Q: Your estimate of the market risk premium is 7%. The risk-free rate of return is 4% and General…

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

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

A: Following details are given : Beta = 0.70 Risk free rate (RRF) = 5.0% Market risk premium (RPM) =…

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…

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

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A: We are require to calculate the Chipotle's cost of equity: Cost of equity can be calculated using…

Q: Treasury bills currently have a return of 2.5% and the market risk premium is 7%. If a firm has a…

A: The cost of equity can be calculated with the help of CAPM equation. The risk free rate is usually…

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Q: Assuming Lululemon has an expected return of 5.6%, treasury bills (risk free rate) yield 2.3% and…

A: according to CAPM model: expected return =rf+beta×rm-rf where, rf=risk free raterm=market return

Q: 2. Given the following data, is there an Arbitrage? What is the Profit when St > K and St < K for…

A: A put option is a type of option that gives the right but not the obligation to holders to sell the…

Q: A company has a beta of 0.6, the T-bill rate is 4.3%, and the expected return on the market  is…

A: The required rate of return can be calculated with the help of CAPM equation.

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A: Capital asset pricing model is a method of calculating expected return on equity by considering the…

Q: You forecast to have a ROE of 14%, and dividend payout ratio of 12%. Currently the company has a…

A: PEG ratio is the ratio of price by earning divided by growth of earning . formula: PEG=P/E…

Q: b. The current market provides a return of 10% and treasury bills yields 3%. i. Calculate the…

A: In the given question we require to calculate the required rate of return of an asset using…

Q: Here are data on two companies. The T-bill rate is 5.6% and the market risk premium is 7.1%. Company…

A: A financial framework employed to estimate an asset's anticipated rate of return is termed the…

Q: Historical nominal returns for Company A have been 8% and -20%. The nominal returns for the market…

A: Expected return on company stock A Where Rf is risk-free return and Rm is the market return Let’s…

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A: Debt RatioThis ratio indicates the percentage of the company's assets financed by debt. A higher…

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A: PE ratio is a relationship between current market price of share and earning per share.

Q: You forecast the company A’s future earning is going to be $5.34 per share. The current market price…

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Q: Your estimate of the market risk premium is​ 6%. The​ risk-free rate of return is​ 4% and General…

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.