Question

With a risk free rate of 3.8% and a market-risk premium of 8.1% , a stock's...

With a risk free rate of 3.8% and a market-risk premium of 8.1% , a stock's expected rate of return is 15.8%. The following year, the market-risk premium decreases by 1% but the stock's beta and the risk free rate remain the same. What will be the expected rate of return on the stock for that year? answer as a percent return to the nearest hundreth as in xx.xx

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
with a risk-free rate of 2.4% and a market risk-premium of 8.3%, a stock's expected rate...
with a risk-free rate of 2.4% and a market risk-premium of 8.3%, a stock's expected rate of return is 11.3%. the following year, the market risk premium decreases by 1% but the stock's beta and the risk free rate remain the same. what will be the expected rate of return on the stock for that year
A stock has a required return of 13%; the risk-free rate is 5%; and the market...
A stock has a required return of 13%; the risk-free rate is 5%; and the market risk premium is 6%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 10%, what would happen to the stock's required rate of return? Assume the risk-free rate and the beta remain unchanged. New stock's required rate of return will be  %. Round your answer to two decimal places.
A stock has a required return of 13%; the risk-free rate is 3.5%; and the market...
A stock has a required return of 13%; the risk-free rate is 3.5%; and the market risk premium is 6%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 9%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. If the stock's beta is greater than 1.0, then the change in required rate of return will be less than...
A stock has a required return of 12%; the risk-free rate is 4%; and the market...
A stock has a required return of 12%; the risk-free rate is 4%; and the market risk premium is 4%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 8%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. If the stock's beta is less than 1.0, then the change in required rate of return will be greater than...
A stock has a required return of 12%, the risk-free rate is 3%, and the market...
A stock has a required return of 12%, the risk-free rate is 3%, and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 10%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is equal to 1.0,...
A stock has a required return of 14%, the risk-free rate is 7.5%, and the market...
A stock has a required return of 14%, the risk-free rate is 7.5%, and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is less than 1.0,...
A stock has a required return of 16%, the risk-free rate is 5%, and the market...
A stock has a required return of 16%, the risk-free rate is 5%, and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 10%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is greater than 1.0,...
A stock has a required return of 10%, the risk-free rate is 2.5%, and the market...
A stock has a required return of 10%, the risk-free rate is 2.5%, and the market risk premium is 4%. a) What is the stock's beta? Round your answer to two decimal places. b) If the market risk premium increased to 8%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is equal...
A stock has a required return of 16%, the risk-free rate is 5.5%, and the market...
A stock has a required return of 16%, the risk-free rate is 5.5%, and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 7%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is greater than 1.0,...
A stock has a required return of 13%, the risk-free rate is 7.5%, and the market...
A stock has a required return of 13%, the risk-free rate is 7.5%, and the market risk premium is 3%. What is the stock's beta? Round your answer to two decimal places. If the market risk premium increased to 7%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places. If the stock's beta is equal to 1.0,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT