Question

what is the equity risk premium for apple inc.?

what is the equity risk premium for apple inc.?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Equity risk premium is additional risk which investor is willing to take over the risk free rate of return in order to make additional rate of return on that equity stock.

Equity risk premium can be calculated by

=[Market expected rate of return-risk free rate of return]

Risk free rate of return for current Market can be around= 1%

Market rate of expected return would be 15% for Apple because it has performed by beating the market on a regular basis.

this has all been the estimated data because the actual data can vary daily upon the fluctuation of stock prices along with estimation by different individuals.

Equity risk premium for apple=[market rate of return for apple-risk free rate of return]

= [15-1]

= 14%

Equity risk premium for investment into Apple would be 14%.

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
Describe what organization similar to Apple Inc. uses Enterprise Risk Management and how do they implement...
Describe what organization similar to Apple Inc. uses Enterprise Risk Management and how do they implement it?
How can Apple Inc. incorporate an enterprise risk management technique into their organizational culture?
How can Apple Inc. incorporate an enterprise risk management technique into their organizational culture?
why equity shareholders ask for additional risk premium for their investmnt ? comment in brief
why equity shareholders ask for additional risk premium for their investmnt ? comment in brief
You are trying to estimate the implied equity risk premium to use for an emerging market...
You are trying to estimate the implied equity risk premium to use for an emerging market and have been provided with the following information: • The equity index for the market is currently trading at 10,500. • Based upon earnings in the just completed financial year, the market trades at a price/earnings ratio of 10. • Earnings are expected to grow 5% a year in perpetuity and firms are expected to pay out 60% of their earnings as dividends in...
You manage an equity fund with an expected risk premium of 10% and a standard deviation...
You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate on T-bills is 6%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in T-bills. What is the expected return of your client's portfolio?
Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium...
Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium approach, and the DCF model. Barton expects next year's annual dividend, D1, to be $1.90 and it expects dividends to grow at a constant rate g = 5.2%. The firm's current common stock price, P0, is $25.00. The current risk-free rate, rRF, = 4.5%; the market risk premium, RPM, = 6.2%, and the firm's stock has a current beta, b, = 1.35. Assume that...
You manage an equity fund with an expected risk premium of 10.4% and a standard deviation...
You manage an equity fund with an expected risk premium of 10.4% and a standard deviation of 18%. The rate on Treasury bills is 5%. Your client chooses to invest $45,000 of her portfolio in your equity fund and $55,000 in a T-bill money market fund. What is the reward-to-volatility (Sharpe) ratio for the equity fund? (Round your answer to 4 decimal places.) Reward to volatility ratio?
Can a company like Apple Inc. use the Enterprise Risk Management technique as a way to...
Can a company like Apple Inc. use the Enterprise Risk Management technique as a way to help the company achieve its critical success factors of increase revenue, increase shareholder value, brand loyalty, product availability, and extensive research and development?
2 You manage an equity fund with an expected risk premium of 13% and a standard...
2 You manage an equity fund with an expected risk premium of 13% and a standard deviation of 44%. The rate on Treasury bills is 6.6%. Your client chooses to invest $90,000 of her portfolio in your equity fund and $60,000 in a T-bill money market fund. What is the expected return and standard deviation of return on your client’s portfolio? (Round your answers to 2 decimal places.) Expected Return % Standard Deviation %
What is the cost of equity for the TMB Corporation based on the following information? Risk...
What is the cost of equity for the TMB Corporation based on the following information? Risk premium = 5% Risk free rate = 4% TMB beta: 1.50
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT