Beta and required rate of returna stock has a required, Ask an Expert

Finance

Beta and required rate of return

A stock has a required return of 11%; the risk-free rate is 2.5%; 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.

If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium.

If the stock's beta is equal to 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium.

If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.

New stock's required rate of return will be

%. Round your answer to two decimal places

View complete question

Financial Management, Finance

Category:- Financial Management
Reference No.:- M91547064

Have any Question?Write your Review or question?

Related Questions in Financial Management

Portfolio projectexotic food inc capital budgeting casecase

Portfolio Project: Exotic Food Inc., Capital Budgeting Case CASE SUMMARY Exotic Food Inc., a food processing company located in Herndon, VA, is considering adding a new division to produce fresh ginger juice. Following t ...

Assignment objectives amp requirements1 to create a new

Assignment Objectives & Requirements: 1. To create a new E-commerce business, which is located in the Kingdom of Saudi Arabia, which include the followings: a. Introduction about your business. b. Product and type of ser ...

Question spirituality is a fundamental and universal

Question : Spirituality is a fundamental and universal aspect of human existence and is a critical component in working with clients, groups, communities, etc. There is a vast diversity in spiritual beliefs and religious ...

Assignmentp6-8nbsprisk-free rate and risk

Assignment P6-8 Risk-free rate and risk premiums The real rate of interest is currently 3%; the inflation expectation and risk premiums for a number of securities follow. Inflation expectation Security Premium Risk pr ...

Assignment introduction to businessdirections be sure to

ASSIGNMENT : Introduction to Business Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure ...

Assignmentthe interview assignment asks you to perform an

Assignment The interview assignment asks you to perform an informational interview with a professional within the Fitness and Wellness industry. The person does not have to be an owner but simply someone who is or has be ...

You have owned and operated a successful brick-and-mortar

You have owned and operated a successful brick-and-mortar business for several years. Due to increased competition from other retailers, you have decided to expand your operations to sell your products via the Internet. ...

Assume that hos could issue a zero coupon bond at an annual

Assume that HOS could issue a zero coupon bond at an annual interest rate of 4 percent with semiannua compounding for 20 years. If HOS receives $2,264.45 for the bond, how much would it have to pay at the maturity date?

International financial management assignment -this

International Financial Management Assignment - This assignment consists of two parts, Part A and Part B. PART A - Assignment Question - As a recent graduate of Afin 867 you have been lucky enough to be offered a consult ...

Case analysis questions1 explain in 175 words what makes a

Case Analysis Questions 1. Explain in 175 words what makes a company a “multinational corporation”. 2. Complete the chart in a total of 350 words using 3 to 5 examples of multinational corporations. 3. Reading through th ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Financial Management Expert