The beta of Westbrook Corp. stock is 1.4. The risk-free rate is 0.05, and the expected market return is 0.14. What should investors expect as a return on Westbrook stock?
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The beta of westbrook solution general accounting question
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- If a stock has a beta of 0.8, what doesthat imply about its risk relative to the market?How do you find the market risk premium and market expected return given the expected return of stock, beta, and risk free rate? Example: The expected return of a stock with a beta of 1.2 is 16.2%. Calculate the market risk premium and the market expected return, given a risk-free rate of 3%.1) The risk-free rate is 3.7 percent and the expected return on the market is 12.3 percent. Stock A has a beta of 1.1 and an expected return of 13.1 percent. Is this stock correctly priced? (underpriced or overpriced?)
- I need answer of this question general financeCompany A has a beta of 0.9 , while Company B's beta is 1.4 . The market risk premium is 13.78 %, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return? (Hint: find the required returns on each stock and then subtract them.)Calcitron Inc. has common stock with a beta of 1.4. The risk-free rate is 3.7 while the market rate of return is 13. What is the equilibrium required rate of return on this stock? Answer:
- Please help with this question with full working out.A) What expected return should an investor expect from investments in common stock? You are given the following information: Risk free rate of return = 4%; market risk premium = 11%; Beta of the stock (assume CAPM holds) = 0.72. B) Stock A with beta of 0.8 offers a 11% return while stock B with a beta of 1.2 offers a 15% return. What is the risk-free rate? What is the common market return? Assume CAPM holds.You are using the CAPM to calculate a fair return for Stardust common stock. The shares have a volatility of 36.00%, while the market has a volatility of 19.00%. The correlation between the two sets of returns is 0.30. The risk free rate is 1.00%, while the expected return on the market is 3.90%. What is the fair return for Stardust common stock?