Given an expected market risk premium of 12.0%, a beta of 0.75 for Benson Industries, and a risk-free rate of 4.0%, what is the expected return for Benson Industries?

Q: The CRT Co. has a beta of 1.6 The expected market return is 9.5 percent and the risk free rate of…

A: Given that;Expected market return is 9.5%Risk free rate is 3.2%Beta is 1.6

Q: You estimate of the market risk premium is 7%. The risk-free rate of return is 3.1 % and General…

A: In the given question we are require to calculate the expected return of General Motors from the…

Q: Suppose that Company ABC has a beta of .92.  The expected return on the market is 13% and the market…

A: Market return (Rm) = 0.13Market risk premium (Mp) = 0.102Beta of the stock (b) = 0.92Expected return…

Q: Hastings Entertainment has a beta of 0.41. If the market return is expected to be 16.90 percent and…

A: As per CAPM model, Required rate of return = Rf + Beta (Rm- Rf) Rm= Market rate of return Rf= Risk…

Q: Your estimate of the market risk premium is 5%. The risk-free rate of return is 3%, and General…

A: General Motors has the following given details:Market Risk premium (Rm-Rf) = 5%Risk free rate (Rf)=…

Q: A company has a beta of  .59. If the market return is expected to be 12.9 percent and the risk-free…

A: To solve the question, we need to use the formula of capital asset pricing model (CAPM), it shows…

Q: If the risk free rate is 6 %, the expected return on the market portfolio is 12% and the beta of…

A: The Capital Asset Pricing Model (CAPM) is the model which shows the relationship between the…

Q: The market risk premium for next period is 9.00% and the risk-free rate is 2.40%. Stock Z has a beta…

A: The volatility of a stock in comparison to the market as a whole is measured by its beta. The…

Q: The risk free rate currently have a return of 2.5% and the market risk premium is 4.22%. If a firm…

A: Cost of equity refers to the net cost that a business entity bears by raising the capital from the…

Q: Vani Corporation's beta coefficient is equal to 0.7 and the required rate of return on the stock…

A: CAPM is used to determine expected return by an investor considering systematic risk and risk-free…

Q: The risk free rate is 4% and the expected rate of return on the market portfolio is 10%.  A.…

A: Risk-free rate = 4% Expected rate of return on market = 10%  The required rate of return on security…

Q: Suppose your company has an equity beta of 0,9 and the current risk-free rate is 7,1%. if the…

A: We require to calculate cost of equity capital in this question.

Q: The S&P500 has an expected return of 15.8%. The riskless rate is 2.7% and XYZ's beta is 1.3. What…

A: In the following question we are required to calculate the expected return on XYZ stock according to…

Q: Walmart's beta is 0.7. The market risk premium is 4.2 %. The appropriate risk-free rate is 0.04 %.…

A: Given information: Beta : 0.7 Market risk premium : 4.2% Risk free rate : 0.04%

Q: Suppose the current risk -free rate of return is 5 percent and the expected market risk premium is 7…

A: As per CAPM,  cost of retained earnings = risk free rate + beta * market risk premium

Q: Breckenridge, Inc., has a beta of 0.97. If the expected market return is 12.0 percent and the​…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: Cooley Company's stock has a beta of 0.8 , the risk-free rate is 1.04 %, and the market risk premium…

A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets…

Q: The expected return on Share X is 15.75% while the risk-free rate of return is 7%. If the expected…

A: Expected return =Rf + beta * ( Rm- Rf) Rf = Risk free rate Rm =Expected return on market

Q: Assume that the risk-free interest rate is 3%, the market rate of return is 7% and the beta for…

A: The comparison of the whole market with the systematic risk or volatility of a stock or the…

Q: Cooley Computer Repair and Service Company's stock has a beta of 1.28, the risk-free rate is 2.25%,…

A: According to capm approach required return is equal to risk free rate plus beta times market risk…

Q: Assuming a risk-free rate of 8 percent and a market return of 12 percent, would it be wise for…

A: The fundamental rate of return is calculated by using the CAPM approach. In this approach, the…

Q: Suppose the common stock of United Industries has a beta of 1.18 and an expected return of 11.9…

A: Market risk premium= Rm-Rfwhere,Rm= market returnRf= Risk-free rate

Q: Assume that the risk-free rate is 3.4%, the equity risk premium is 8%. A security with a beta of 1.2…

A: Using CAPM Model

Q: A firm is considering a project that is expected to have a beta of 1.2. The risk-free rate is 8.3%.…

A: As per CAPM approach required return is equal to risk free rate plus beta times market risk premium…

Q: Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a…

A: We are given following details : Expected return on market = 18% Beta = 1.2 Expected return on stock…

Q: Nanometrics, Inc. has a beta of 2.01. If the market return is expected to be 12.50 percent and the…

A: Given information: Beta value is 2.01 Market return is expected to be 12.50% Risk-free rate is 5.00%

Q: The risk-free rate of return is currently 0.03, whereas the market risk premium is 0.04. If the beta…

A: Following details are given in the question: Risk free rate of return = 0.03 = 3% Market Risk…

Q: The market risk premium for next period is 5.28% and the risk-free rate is 2.55%. Stock Z has a beta…

A: Market risk premium= 5.28%Risk-free rate = 2.55%Stock Z beta = 1.14Expected return = 8.17%

Q: 1.Gray corporation has a beta of 1.3, the risk-free rate is 3.8 percent and the return on the market…

A: We can determine the required rate of return of Gray Corportion Equity using the CAPM formula as…

Q: If the return on the risk-free asset is 2.25% (Rf = 2.25%) and the market return is 6.50% (Rm =…

A: Beta shows magnitude of systematic risk related to stock. It shows volatility in stock returns over…

Q: If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert…

A: The term beta of a stock represents the responsiveness of a particular stock in relation to the…

Q: Hastings Entertainment has a beta of 0.69. If the market return is expected to be 12.10 percent and…

A: Here,Beta is 0.69Market Return is 12.10%Risk Free Eare is 5.10%

Q: a) Astock has expected return of 10% and a beta of 0.70. Assume the risk - free rate is 5.5% . what…

A: Required rate is the expected rate from stock by investors based on the risk involved on the stock…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.