Compute a fair rate of return for Intel common stock, which has a 1.6 beta. The risk-free rate is 6 percent, and the market portfolio (New York Stock Exchange stocks) has an expected return of 12 percent.
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- (Expected rate of return using CAPM) a. Compute the expected rate of return for Intel common stock, which has a 1.5 beta. The risk-free rate is 4 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 13 percent. b. Why is the rate you computed the expected rate? a. The expected rate of return for Intel common stock is%. (Round to one decimal place.)The rate of return on the market stock index is 13 percent. The rate of return on a risk-freebank account is 1%. The B (beta) of stock XYZ is 1.5. Use the data to answer the questionsbelow.a. What is the market risk premium? Show your work.b. What is the cost of equity for XYZ? Show your work.c. What is the stock XYZ risk premium? Show your work.d. Draw the graph of the Security Market Line and show the stock of XYZ on the graph.The end-of-year dividend on stock ABC is expected to be $0.8. The growth rate of dividend isexpected to be 5 percent for ever. The current price of the ABC stock is $10. Use the data toanswer the questions below.e. What is the cost of equity for stock ABC? Show your work.f. Suppose stock KLM has the same end-of-year dividend, dividend growth rate andprice as stock ABC, but the risk of KLM stock is much greater than of the ABC stock.What is your estimate of the cost of equity of stock KLM using the method at part e?Do you agree with the valuation of the cost of…a. Compute the expected rate of return for Intel common stock, which has a 1.5 beta. The risk-free rate is 4 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 14 percent. b. Why is the rate you computed the expected rate?
- AmDa’s common stock has a beta of 1.4. The market risk premium is 5% and the risk-free rate is 2%. What is the required rate of return on this stock according to CAPM?(Expected rate of return using CAPM) a. Compute the expected rate of return for Acer common stock, which has a 1.8 beta. The risk-free rate is 5 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 13 percent. b. Why is the rate you computed the expected rate? ... a. The expected rate of return for Acer common stock is %. (Round to one decimal place.)Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here, given that the risk-free rate is 6 percent and the expected return for the market is 14 percent. STOCK ВЕТА A 0.62 B 1.09 1.48 a. Using the CAPM, the required rate of return for stock A is %. (Round to two decimal places.) b. Using the CAPM, the required rate of return for stock B is %. (Round to two decimal places.) c. Using the CAPM, the required rate of return for stock C is %. (Round to two decimal places
- stoch XYZ has an expected return of 12% and risk of Beta=1. stock ABC has expected return of 13% and Beta= 1.5. the market's expected return is 11% and Rf = 5%. according to the CAPM, calculate the expected return of each stock. also draw the SML curve. please show the calculation using excelWildings, Inc. common stock has a beta of 1.2. If the expected risk free return is .04 and the expected market risk premium is .09, what is the expected return on Wildings' stock? Instruction: Round to three decimal placesYou are using the CAPM to calculate a fair return for Stardust common stock. The shares have a volatility of 28.00%, while the market has a volatility of 15.00%. The correlation between the two sets of returns is 0.3. The risk free rate is 2.60%, while the expected return on the market is 4.80%. What is the fair return for Stardust common stock?
- JaiLai Cos. stock has a beta of 0.9, the current risk-free rate is 6.5 percent, and the expected return on the market is 11 percent. What is JaiLai’s cost of equity? (Round your answer to 2 decimal places.)Please give me answer general accountingJaiLai Cos. stock has a beta of 0.6, the current risk-free rate is 6.0 percent, and the expected return on the market is 10 percent.What is JaiLai’s cost of equity? (Round your answer to 2 decimal places.)
