Assume that the risk-free and rate is 5.50% and the market risk premium is 7.75%. What is the expected return for the overall stock market (rm)?

Q: A stock has an expected return of 14.3 percent, the risk-free rate is 3.9 percent, and the market…

A: Given: Expected return = 14.3% Risk free rate = 3.9% Market risk premium = 7.8%

Q: The risk-free rate is 3.4 percent and the market expected return is 11.9 percent. What is the…

A: The expected return of a stock can be found out using the CAPM formula. Given, Rf = Risk free…

Q: Assume that the risk-free rate of return is 46 and the market risk premium (Le, Rm-Re) is 8%. If use…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: Assume that the risk-free rate is 7.5% and the market risk premium is 5%. What is the required…

A: We need to use CAPM equation to calculate required rate of return. The equation is  rs =Rf+beta…

Q: What is the beta of a firm whose equity has an expected return of 21.3 percent when the risk-free…

A: Using CAPM

Q: Stock A has a risk premium of 5.6 percent. If Treasury bills yield 2.3 percent and the expected…

A: The evaluation of the systematic risk or volatility of a stock or the portfolio as compared to the…

Q: A stock has a required return of 9%, the risk-freerate is 4.5%, and the market risk premium is 3%.a.…

A: Capital Asset Pricing Model (CAPM): CAPM is the method of calculating the expected return on…

Q: If the risk free rate is 6 %, the expected return on the market portfolio is 12% and the beta of…

A: The Capital Asset Pricing Model (CAPM) is the model which shows the relationship between the…

Q: The expected return for a stock, calculated using the CAP M is 10.5%. The market free return is 9.5%…

A: In the given question we are require to calculate the risk free rate : We can calculate the risk…

Q: Suppose the market risk premium is 9 % and also that the standard deviation of returns on the market…

A: Expected rate of return is the minimum return that a shareholder requires on the investment made in…

Q: Assume that the risk-free rate is 7.5% and the market risk premium is 5%. What is the required…

A: We need to use CAPM to calculate required rate of return. The equation is rs = Rf +Beta(Rm-Rf) Where…

Q: A stock has an expected return of 11 percent, the risk-free rate is 6.1 percent, and the market risk…

A: Beta: The volatility of a stock in relation to the entire market is measured by its beta. Individual…

Q: porter's Inc.'s stock has an expexted return of 12.5%, a beta of 1.25, and is in equilibrium. If the…

A: Computation of market risk premium:Market risk premium is 8.40%.Excel spread sheet:

Q: The current risk-free rate of return is 2.5 percent and the market risk premium is 5 percent. If the…

A: The return which the investors are expected in order to invest in specific securities is referred to…

Q: Assuming that the CAPM approach is appropriate, compute the required rate of return for each of the…

A: Given: Risk free rate = 0.07 Market rate = 0.13 Different betas:

Q: The average return on the Market is 12% while the market risk premium is 7%. What is the require…

A: Market return = 12% Market premium = 7% Risk free rate = 12%-7% = 5%

Q: According to the CAPM, what is the expected market return given an expected return on a security of…

A: Details given are : Expected return on security = 15.8% Beta = 1.2 Risk free rate (Rf) = 5% We need…

Q: If the risk premium on the stock market was 6.96 percent and the risk-free rate was 2.60 percent,…

A: Risk premium of market = 6.96% Risk free rate = 2.60%

Q: A share has a beta of 0.90, the expected return on the market is 8.5% and the risk-free rate is 2.2%…

A: Beta = 0.90 Market return = 8.5% Risk free rate = 2.2%

Q: The risk-free rate of return is 3.7 percent and the market risk premium is 6.2 percent. What is the…

A: The given question can be solved using capital asset pricing model (CAPM)

Q: Assume that the risk-free rate of return is 4% and the market risk premium (i.e., Rm - Rf) is 8%. If…

A: Financial statements are statements which states the business activities performed by the company .…

Q: If the expected return on the market is 16%, then using the historical risk premium on large stocks…

A: In the given problem we require to calculate the risk free rate from following details: Expected…

Q: A stock has an expected return of 13.4 percent, its beta is 1.60, and the risk-free rate is 5.5…

A: We require to compute the expected market return (Rm) from following details : Expected return on…

Q: Suppose the expected return for the market portfolio and risk-free rate are 13 percent and 3 percent…

A: Treynor ratio = (Expected return - Risk free rate) / BetaTreynor ratio of the market = (Expected…

Q: What must the expected return on the market be?

A: Introduction: The expected return of market is considered to be an important concept because it is…

Q: The common stock of Peeta Inc. has an expected return of 15.0%, the risk-free rate is 3.20%, and the…

A: The return which a company decides as a cost if an investment meets its capital requirement is…

Q: Assume that the risk-free rate of return is 4% and the market risk premium (i.e., Rm - R) is 8%. If…

A: Given: Risk free rate of return =4%Market risk premium =8%Beta =1.28

Q: A stock has an expected return of 13.1%, its beta is 1.70, and the risk free premium rate is 2.6%.…

A: In the given question we require to calculate the expected return on market from the following…

Q: what are the two type parts of most stocks expected total return? if D1=$2.00, g= 6% and po $40.00,…

A: Annual dividend (D1)= $2  Growth rate (g)= 6% Current stock price (P0)= $40

Q: A stock has an expected return of 14 percent, its beta is 1.45, and the expected return on the…

A: In this question we need to compute the risk free rate. We can solve this question using CAPM…

Q: Porter's Inc.'s stock has an expexted return of 12.5%, a beta of 1.25, and is in equilibrium. If the…

A: Following details are given in the question for Porter's Inc Stock: Expected Return = 12.5% Beta =…

Q: If the risk free rate is 2 9%, the expected return on the market portfolio is 1296 and the beta of…

A: Financial statements are statements which states the business activities performed by the company .…

Q: Suppose that the risk-free rate is 3% and the market risk premium is 8%. According to the CAPM,what…

A: The capital asset pricing model is the tool used to analyze the relationship between the risk and…

Q: According to the CAPM, what is the market risk premium given an expected return on a security of…

A: Market risk premium = ( Expected return  -  risk free rate ) / beta

Q: If an average share of stock is expected to yield a return of 7.2% and comparable Treasury bonds…

A: In this question we need to compute the value of market risk premium.

Q: A stock has an expected return of 18.00%. The risk-free rate is 1.45% and the market risk premium is…

A: Marker Risk Premium excess return that market offers above risk-free rate. It is compensation to…

Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…

A: Given, Expected return for Stock L (E(R))= 10.5% Nominal Risk Free Rate (Rf) = 3.5% Expected Return…

Q: A stock has an expected return of 11.5 percent, the risk-free rate is 3.2 percent, and the market…

A: Expected return of a stock can be computed by using capital asset pricing model: Here, Expected…

Q: Assume the expected return on the market is 18 percent and the risk-free rate is 4 percent.…

A: Expected return means the percentage of profit that investor is expected depending upon the risk…

Q: A stock has an expected return of 11.0%, its beta is 0.95, and the risk-free rate is 6.00%. What…

A: In the given question we require to calculate the expected return on market from following details:…

Q: Stock M has a relevant risk equals 1.75, and unsystematic risk equals 2. If the real risk-free rate…

A: RRR adjusted for inflation = [(1+RRR)/(1-i)] - 1   where RRR is Required Rate of Return = Risk Free…

Q: The risk-free rate of return is 4 percent and the market risk premium is 8 percent. What is the…

A: In given question we need to compute the expected rate of return for stock.

Q: The risk-free rate of return is currently 0.02, whereas the market risk premium is 0.07. If the beta…

A: Capital Pricing Model (CAPM) is an investment theory that shows the relationship between the…

Q: What is the required rate of return on a preferred stock with a $50 par value,a stated annual…

A: The computation of dividend as follows:

Q: Assume that the risk-free rate of return is 4% and the market risk premium (ie, Rm - Rp) is 8%. If…

A: Financial statements are statements which states the business activities performed by the company .…

Q: The risk-free rate of return is currently 0.04, whereas the market risk premium is 0.06. If the beta…

A: In this question we need to compute the expected return on RKP. We can solve this que with CAPM…

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.