Question

In: Finance

Assume that the risk-free rate is 6% and the required return onthe market is 9%....

Assume that the risk-free rate is 6% and the required return on the market is 9%. What is the required rate of return on a stock with a beta of 0.6? Round your answer to two decimal places.

Solutions

Expert Solution

The required rate of return using CAPM

The required rate of return is 8.40%


Related Solutions

Assume that the risk-free rate is 3% and the required return on the market is 9%....
Assume that the risk-free rate is 3% and the required return on the market is 9%. What is the required rate of return on a stock with a beta of 2.2? Round your answer to two decimal places.
Assume that the risk-free rate is 2.5% and the required return on the market is 10%....
Assume that the risk-free rate is 2.5% and the required return on the market is 10%. What is the required rate of return on a stock with a beta of 2.1? Round your answer to two decimal places.
Assume that the risk-free rate is 4.5% and the required return on the market is 8%....
Assume that the risk-free rate is 4.5% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places.
A stock has a required return of 13%, the risk-free rate is 6%, and the market...
A stock has a required return of 13%, the risk-free rate is 6%, and the market risk premium is 4%. What is the stock's beta? Round your answer to two decimal places. New stock's required rate of return will be
Risk free rate of return is 5% & required rate of return on the market is...
Risk free rate of return is 5% & required rate of return on the market is 9%. What is the security market line? If corporate beta is 1.8 what does that mean?
If the risk free rate of return is 7%, the required return on the market is...
If the risk free rate of return is 7%, the required return on the market is 10%, and the required rate of return on Stock J is 13%, what is Stock J’s beta coefficient? a. 1.0 b. 1.5 c. 2.0 d. 2.5 e. 3.0
Assume that the risk-free rate of return (Krf) is 3% and the required rate of return...
Assume that the risk-free rate of return (Krf) is 3% and the required rate of return on the market (Km) is 8%. A given stock, say, Caterpillar (CAT) has a beta coefficient of 1.03. If the dividend per share during the coming year, meaning D1, is $4.12 and g = 3.50%, what is the current intrinsic value of the stock? Exactly how much was D0? How long will it take for the dividend to double, given the growth rate, approximately?...
The risk-free rate of return is 6%, the expected rate of return on the market portfolio...
The risk-free rate of return is 6%, the expected rate of return on the market portfolio is 15%, and the stock of Xyrong Corporation has a beta coefficient of 2.3. Xyrong pays out 45% of its earnings in dividends, and the latest earnings announced were $9.00 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 18% per year on all reinvested earnings forever. a. What is the...
The risk-free rate of return is 6%, the expected rate of return on the market portfolio...
The risk-free rate of return is 6%, the expected rate of return on the market portfolio is 14%, and the stock of Xyrong Corporation has a beta coefficient of 1.3. Xyrong pays out 50% of its earnings in dividends, and the latest earnings announced were $8.00 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 15% per year on all reinvested earnings forever. a. What is the...
Assume that the risk-free rate of interest is 6% and the expected rate of return on...
Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%. Consider the following questions. a. A share of stock sells for $50 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 1.2. What do investors expect the stock to sell for at the end of the year? b. I am buying a firm with an expected perpetual cash flow of...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT