The risk-free rate is 3.2%, the market risk premium is 7.8%, and the stock's beta is 1.65. What is the cost of common stock using the CAPM equation?
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- 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%.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)?General Accounting
- If put A has T = 0.5, X = 50, sigma = 0.2, and a price of 10, and put B has T = 0.5, X = 50, sigma = 0.2, and a price of 12, which put is written on a stock with a lower price (and why)?Assume that the risk-free rate is 2.8 percent, and that the market risk premium is 4.8 percent. If a stock has a required rate of return of 16.1 percent, what is its beta? Your Answer: AnswerAssume that the risk-free and rate is 5.50% and the market risk premium is 7.75%. What is the expected return for the overall stock market (rm)?