zuber inc stock has a beta of 1.30, the risk free rate is 1.50% and the...

zuber inc stock has a beta of 1.30, the risk free rate is 1.50% and the market portfolio return is 9.0%. what is the firms required rate of return?

Solutions

Expert Solution

Calculation of the required rate of return of Zuber Inc.

Formula,

Required rate of return = Risk free rate + beta x (Market return - Risk free rate)

= 1.50% + 1.30 x (9%-1.50)

= 1.50% + 1.30 x 7.50%

= 1.50% + 9.75%

= 11.25% (Answer)

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Fusilli Jerry Corp's common stock has a beta of 1.30. If the risk free rate of...

Fusilli Jerry Corp's common stock has a beta of 1.30. If the risk free rate of return is expected to be 4% and the market risk premium is 10%, what is the required return on Fusilli Jerry Corp's common stock? 53.00 17.00 74.20 22.20

Juvani has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and...

Juvani has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and the required return on the market portfolio is 18 percent. The company plans to pay a dividend of $2.45 per share in the coming year and anticipates that its future dividends will increase at an annual rate as follow; D2017= 2,32, D2016= 2.12, D2015=2.30. what is the price of Juvani stock Please Solve As soon as Solve quickly I get you two UPVOTE directly...

2. The stock of Healthy Eating, Inc., has a beta of .88. The risk-free rate is...

2. The stock of Healthy Eating, Inc., has a beta of .88. The risk-free rate is 3.8 percent and the market return is 9.6 percent. What is the expected return on Healthy Eating's stock?

Apex Roofings's stock has a beta of 1.50, its required return is 17.00%, and the risk-free...

Apex Roofings's stock has a beta of 1.50, its required return is 17.00%, and the risk-free rate is 5.00%. What is the required rate of return on the stock market?

1) Zelo, inc. Stock has beta of 1.5. The risk free rate of return is 5%...

1) Zelo, inc. Stock has beta of 1.5. The risk free rate of return is 5% and the market rate of return is 10%. What is the amount of the risk Premium on zelo Stock? A) 5% B) 10% C)7.5% D) 12.5% 2) You want your portfolio beta to be 1.20. Currently, your portfolio consists of $100 ivnested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You have another $400...

Stock A has a beta of 1.5, the risk-free rate is 4% and the return on...

Stock A has a beta of 1.5, the risk-free rate is 4% and the return on the market is 9%. If inflation changes by -2%, by how much will the required return on Stock A change?

Stock A has a beta of 0, the risk-free rate is 4% and the return on...

Stock A has a beta of 0, the risk-free rate is 4% and the return on the market is 9%. If the market risk premium changes by 8%, by how much will the required return on Stock A change?

a) KP’s stock has a beta of 1.20. The risk free rate is 3% and the...

a) KP’s stock has a beta of 1.20. The risk free rate is 3% and the expected market risk premium E(rm)-rf is 6%. What is the required rate of return on KP stock? b) KP just paid a dividend (D0) of $2.00. Dividends are expected to grow at 17% per year for the next 4 years, after which they will grow at 3% forever. What is KP’s current stock price per share? Note that the required return on the stock...

The risk-free rate is 4.6 percent. Stock A has a beta = 1.2 and Stock B has...

The risk-free rate is 4.6 percent. Stock A has a beta = 1.2 and Stock B has a beta = 1. Stock A has a required return of 12.1 percent. What is Stock B’s required return? Group of answer choices 11.05% 10.85% 10.95% 11.15% 11.25% You observe the following yield curve for Treasury securities: Maturity Yield 1 Year 3.20% 2 Years 4.40% 3 Years 5.20% 4 Years 5.40% 5 Years 7.40% Assume that the pure expectations hypothesis holds. What does the market expect will be the yield on 3-year securities,...

Scott, Inc. common stock has an equity beta of 1.1, the annual risk-free rate is 5%,...

Scott, Inc. common stock has an equity beta of 1.1, the annual risk-free rate is 5%, and the expected return on the market portfolio is 10%. The firm expects that following 2009 its dividends will increase at the same annual compound rate as that over the 2006-2009 period. Year. Dividend 2006 2.5 2007 2.6 2008 2.7 2009 2.8 Estimate the value of a share of Scott, Inc.’s stock using the dividend discount model. Round your final answer to two decimals.

Subjects