Answered: A stock has an expected return of 13…

A stock has an expected return of 13 percent, its beta is 0.55, and the risk-free rate is 6.5 percent. What must the expected return on the market be?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...

See similar textbooks

Related questions

Q: What is its ROE on these financial Accounting Question? Do not use ai

A: Step 1: Define Return on EquityReturn on equity is a financial ratio that shows the ability of a…

Q: Analyzing Clorox's Property, Plant, and Equipment Disclosures 1. Which depreciation method does…

A: 1. Clorox follows the straight-line technique of depreciation. This strategy is popular among firms…

Q: Compute the following ratios on these accounting question

A: Step 1: Compute the variable overhead spending variance by using the following formula:Computation…

Q: Today, Thomas deposited $170,000 in a three-year, 4% investment account that compounds quarterly.…

A: The problem is asking us to find the future value (FV) of a present value (PV) investment, given a…

Q: Get correct answer general accounting

A: Step 1: Define DepreciationThe units-of-production method is used for assets that wear and tear more…

Q: Financial Accounting Question of the Higher fill Answer

A: From the given data, Standard quantity for actual production (SQ)= Actual units produced x Standard…

Q: Get correct solution for this accounting question please do fast

A: Step 1: Define Operating ratioOperating ratio is the difference between combined ratio and…

Q: CORIS RECREATION ASSEMBLY CORIS RA is a government owned enterprise which is legislated to generate…

A: Part AStatement of Cash FlowFor the year ended December 31, 2020(Amounts in $) CASH FLOWS FROM…

Q: Listed below

A: Step 1: Calculate the Cost of Goods ManufacturedThis represents the units completed during the…

Q: Presented below is the production data for the first six months of the year showing the mixed costs…

A: Step 1: Define Mixed CostA mixed cost is a cost item that does not display pure fixed cost behavior…

Q: Arden Company reported the following costs and expenses for the most recent month: solve this…

A: Step 1: Define Total Manufacturing CostIn cost accounting, the total manufacturing cost refers to…

Q: I need answer correct

A: Option (d) is correct because it strikes a balance between providing a long-term perspective and…

Q: 22.)

A: If you have any clarifications (i.e., expand the explanation) or want different, expanded, or…

Q: Get correct answer general accounting

A: Step 1: Define Net IncomeNet income is the excess of revenues over the expenditures and is a very…

Q: General accounting

A: Option A: This option is incorrect because by dividing the gross margin by the sales we get the…

Q: On January 1, year 1, Pungent Corporation please solve these general accounting question

A: Step 1: Define GoodwillGoodwill is an intangible asset connected with firm purchases. Goodwill is…

Q: answer must be in table format or i will give down vote

A: Let's start by journalizing the transactions:January 31: Issued 5,000 common shares for $12 each.…

Q: A game show contestant must choose between two prizes: $500,000 in 30 years or $5,000 today.…

A: To determine the better choice, we need to calculate the present value (PV) of the $500,000 prize…

Q: Please give me answer general accounting

A: Step 1: Define Factory OverheadsFactory overheads refer to all expenses that cannot be traced back…

Q: Financial accounting 5.3

A: Calculate the Current Profit per UnitMaxiDrive's current selling price per unit is $700, and the…

Q: Need all answer

A: Other potential impacts of rising inventory levels on the company's financial statements:1. Balance…

Q: Answer in millions of this Financial accounting Question

A: Step 1:Rearrange the ROA formula to solve for total assetsStep 2:Find Net IncomeStep 3:Calculate…

Q: Assume that Juicy reports the following costs to make 17.5 oz. bottles for its Juice Cocktails:…

A: Step 1:The schedule that compares the total costs to make and buy the 17.5 oz. bottles is prepared…

Q: Financial Accounting

A: Step 1: Define Variable Overhead VariancesThe formulas used to calculate the variable overhead…

Q: Solution

A: Explanation of Net Income: Net income represents the total earnings or profit that a company…

Q: Please solve these general accounting problem and give correct answer

A: Step 1: Define Asset AmortizationAmortization can be defined as a process of distributing the cost…

Q: Accounting Question: only expert can solve this

A: Direct materials 4,200.00 Direct labor (95 labor hours x 20) 1,900.00 Overhead (145 machine…

Q: Give true answer this accounting question

A: Step 1:Computation of the present value ordinary annuity at 12% for 4 years: Rate (r) = 12% or…

Q: Gr

A: Step 1: Find the gross profit.= sales - cost of goods sold= 255,000 - 105,000= 150,000 Step 2:…

Q: When a single manufacturing process yields two products, one of which has a relatively high sales…

A: In a manufacturing process, when two or more products are produced simultaneously, they are referred…

Q: Please provide step by step explanation of the calculations. Thank you.

A: Step 1: Make a sales budgetSales budget MarchAprilMayJuneJuly2nd quarterUnit…

Q: GP ℅ FOR THIS PERIOD?

A: Explanation of Net Sales Revenue: Net sales revenue represents the total amount of money generated…

Q: Accounting Question please solve

A: Step 1: Define Material Quantity VarianceDirect material quantity variance arises when there is a…

Q: What percentage of sales is expected to be returned on these general accounting question?

A: Step 1: Define Sales ReturnThe goods that have been returned by the customers is called sales…

Q: Please give me answer general accounting

A: Calculations:Beta:We can use the Capital Asset Pricing Model (CAPM) to calculate the beta:Expected…

Q: Please financial accounting expert tutor solve the problem

A: Explanation of Cost of Equity:The cost of equity represents the return that investors expect for…

Q: Get Answer of this Question withing Accounting Method

A: Step 1: Define InventoryInventory is the physical stock of goods, which is kept in hand for smooth…

Q: Provide answer to this accounting Question

A: Explanation of Balanced Scorecard: The balanced scorecard is a strategic management tool that…

Q: If you give me wrong answer I will give you unhelpful rate on these accounting question

A: Step 1: Introduction Dupont framework was developed by DuPont corporation in 1920. It is an extended…

Q: Prblm

A: Step 1:To calculate the total assets of the firm, we only consider asset-related components from the…

Q: Please provide step by step guidiance with workings

A: (a) Newsboy ProblemThe goal is to determine if ordering 100 newspapers is the best quantity for…

Q: Need accurate answer of this financial accounting Question

A: Detailed explanation: • The payback period approach to capital budgeting chiefly focuses on the…

Q: Please give me answer accounting

A: Straight-line depreciation method:Step 1: Determine the depreciable cost.Depreciable cost = Cost of…

Q: Give answer

A: Explanation of Cost Basis: Cost basis represents the total cost of acquiring an asset and making it…

Q: Answer this theoretical Question of financial accounting

A: Definitions:1. Non-Controlling Interests (NCI)Non-controlling interests (NCI) represent the…

Q: Please Provide Answer about this Account Question

A: Step 1: Calculate Net Credit Sales• Net Credit Sales = Credit Sales - Sales ReturnsStep 2: Calculate…

Q: General Accounting

A: Explanation: Accrual basis of accounting is the method of recording transactions as and when they…

Q: Need help with this accounting question Do not use Ai

A: Step 1: Define Asset Turnover Ratio and Return in InvestmentsThe assets turnover ratio reflects the…

Q: Please! Do the last part D of this question!

A: Step 1: Calculate the present value of the noteWe can use the present value of an ordinary annuity…

Q: Describe the answer with explanation

A: Explanation of Unwinding of Discount: The unwinding of discount refers to the gradual increase in…

Question

Please provide this question solution general accounting

A stock has an expected return of 13 percent,
its beta is 0.55, and the risk-free rate is 6.5
percent. What must the expected return on
the market be?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. a. What are the betas of Stocks X and Y? b. What are the required rates of return on Stocks X and Y? c. What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?
Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2) a stock with a beta of 1.0, and (3) a stock with a beta of 1.7?
Now assume that the stock is currently selling at $30.29. What is its expected rate of return?
AA Corporations stock has a beta of 0.8. The risk-free rate is 4%, and the expected return on the market is 12%. What is the required rate of return on AAs stock?
A stock has an expected return of 13.5 percent, its beta is 1.16, and the expected return on the market is 12.5 percent. What must the risk-free rate be?
A stock has an expected return of 10.8 percent, its beta is .97, and the risk-free rate is 6.1 percent. What must the expected return on the market be? (
The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock’s beta is 2.27. What is the required rate of return on the stock, E(Ri)? Use the CAPM equation.
c. A stock has an expected return of 15 percent, its beta is 0.9, and the risk-free rate is 6 percent. What must the expected return on the market be?
A stock has an expected return of 13.1%, its beta is 1.70, and the risk free premium rate is 2.6%. What must the expected return on the market be?
A stock has an expected return of 13.4 percent and a beta of 1.15, and the expected return on the market is 12.4 percent. What must the risk - free rate be?
A stock has an expected return of 13.1 percent, its beta is 1.70 and the risk free premium rate is 2.6 percent. What must the expected return on the market be?
A stock has an expected return of 14.1 percent, a beta of 1.8, and the return on the market is 9.8 percent. What must the risk-free rate be?