Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Basic Finance Expert

The expected return on KarolCo. stock is 16.5 percent. If the risk-free rate is 5 percent and the beta of KarolCo is 2.3, then what is the risk premium on the market assuming CAPM is true? Using this information, what is the rate of return on the market?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M9879642

Have any Question?


Related Questions in Basic Finance

An organization considers two mutually exclusive real

An organization considers two mutually exclusive real estate projects with identical initial investments of US $100,000.00 but different expected cash flows. The organization requires a 10 percent return on these types o ...

1 your firm expects to incur a 500k loss in year 1 and make

1. Your firm expects to incur a ($500K) loss in year 1 and make $100K of net income in year 2 and $300K of net income in year 3. The retention ratio is projected to be 100%. The beginning equity balance on the balance sh ...

Set up an amortization schedule for a 15000 loan to be

Set up an amortization schedule for a $15,000 loan to be repaid in equal installments at the end of each of the next 4 years. The interest rate is 10%. How large must each payment be if the loan is for $30,000? Assume th ...

If you take out a 15-year loan in the amount of 370000 at 7

If you take out a 15-year loan in the amount of $370,000 at 7 percent rate annually. The loan is to be paid off by equal monthly installments over 15 years. Draw an amortization table showing the beginning balance, total ...

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. Assume that the first cash flow will occur one year from today (that is, at t = 1). (Round your answer ...

Tiffany borrows a 200000 5 years loan at 7 with a fixed

Tiffany borrows a $200,000, 5 years loan at 7%, with a fixed amount of principal to be repaid every year. What is the total amount that she will need to pay at the end of year 4? (round off all answers to 2 decimal place ...

What is the irr and mirr for a project that costs 5500 and

What is the IRR and MIRR for a project that costs $5,500 and is expected to generate $1,800 per year for the next four years? If the firms required rate of return is 8%, should the project be accepted?

Question - pkof considers bidding for a big dredging

Question - PKOF considers bidding for a big dredging project in the port of Lagos. The project would yield annual cash flows of 2.5 billion NGN for the next three years. At the current exchange rate of NGN 125/EUR, this ...

Small fry inc has just invented a potato chip that looks

Small Fry, Inc., has just invented a potato chip that looks and tastes like a french fry. Given the phenomenal market response to this product, Small Fry is reinvesting all of its earnings to expand its operations. Earni ...

Leo received 7500 today and will receive another 5000 two

Leo received $7,500 today and will receive another $5,000 two years from today. He will invest these funds when he receives them and expects to earn a rate of return of 11.5 percent. What value does he expect his investm ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As