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
- Given correct answer financial accountingA stock's beta is 1.8 and the market risk premium is 6.6%. If the risk-free rate is 3.1%, what is the stock's risk premium? Answer:Suppose the beta estimated from the CAPM for stock A is 2.3 and stock B is 1.1. What is the beta of an equally weighted stock portoflio of A and B stock?