Paycheck, Inc. has a beta of 1.27. If the market return is expected to be 14.70 percent and the risk-free rate is 5.70 percent, what is Paycheck's risk premium? (Round your answer to 2 decimal places) Paycheck's mink promum
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- Q2: By using CAPM calculate the required return on equity if Risk free rate is 18%, Expected Market Return is 20% and company beta is 1.5Q4 Hastings Entertainment has a beta of 0.65. If the market return is expected to be 11 percent and the risk-free rate is 4 percent, what is Hastings' required return? (Round your answer to 2 decimal places.) HASTING'S REQUIRED RETURN. %Month Zemin Corp. Market1 5% 3%2 2% 1%3 -1% 1%4 -2% -1%5 4% 4%6 3% 4% a. Given the following holding-period returns, compute the average returns and the standard deviations for the Zemin Corporation and for the market. b.If Zemin's beta is 0.83 and the risk-free rate is 9 percent, what would be an expected return for an investor owning Zemin? (Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by 12.) c. How does Zemin's historical average return compare with the return you believe you should expect based on the capital asset pricing model and the firm's systematic risk?
- Beta 0.53 Risk-free Rate 0.7% MRP 5.55% Given the data in the table, what is the stock's risk premium? Answer as a percent and use 2 decimal places.7. Problem 8.03 (Required Rate of Return) eBook Assume that the risk-free rate is 7.5% and the required return on the market is 11%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places. %Paycheck, Inc. has a beta of 1.02. If the market return is expected to be 16.90 percent and the risk-free rate is 9.90 percent, what is Paycheck’s risk premium? (Round your answer to 2 decimal places.) Paycheck's Risk Premium: ___.__%
- Help Save & Exit Su The risk-free rate of return is 5.4 percent and the market risk premium is 13 percent. What is the expected rate of return on a stock with a beta of 1.6? Multiple Choice 21.64% 13.10% 20.80% 10.82% 26.20% Next > < Prev 11 of 409. Problem 8.03 (Required Rate of Return) A-Z dOffice eBook Assume that the risk-free rate is 2.5% and the required return on the market is 13%. What is the required rate of return on a stock with a beta of 0.9? Round your answer to two decimal places. %Suppose the market risk premium is 5% and the risk-free interest rate is 5%. Using the data in the table here, a. Starbucks's stock. b. Hormel's stock. c. Avis Budget Group's stock. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Hormel 0.16 Avis Budget Group 2.55 Beta Starbucks 1.05 X " calculate the expected return of investing in
- Intro Amazon has a beta of 0.8. The risk-free rate is 2.9% and the expected return on the S&P500 is 4%. Part 1 What is Amazon's cost of equity? 4+ decimals Submit Part 2 Now assume that the expected market risk premium is 4%. What is Amazon's cost of equity? 3+ decimals Submitn Question 3 Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Firm Beta Anderson, Inc. 0.90 Delta Vanlines 1.25 13.0% 1.60 16.0% Nathan's Bakeries Z-man Electronics O Z-man Electronics O Anderson, Inc. 1.90 19.0% O All of the stocks Expected Return 10.5% O Nathan's Bakeries O Delta Vanlines11. Changesto the security market line The following graph plots the current security market line (SML) and indicates the return that investors require from holding stock from Happy Corp. (HC). Based on the graph, complete the table that follows. (Tool tip: Mouse over the points in the graph to see their coordinates.) REQUIRED RATE OF RETURN (Percent) 20.0 16.0 12.0 8.0 4.0 O Do 0.5 ■ 1.0 RISK (Beta) 1.5 2.0 (?)