The stock of Delta Electrical, Inc., has a beta of 0.98. The market risk premium is 9 percent and the risk-free rate is 2.4 percent. What is the expected return on this stock? A) 8.91 percent B) 9.43 percent C) 10.67 percent D) 11.22 percent E) 13.22 percent

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
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What is the expected return on this stock? General accounting

The stock of Delta Electrical, Inc., has a beta of 0.98. The market risk
premium is 9 percent and the risk-free rate is 2.4 percent. What is the
expected return on this stock?
A) 8.91 percent
B) 9.43 percent
C) 10.67 percent
D) 11.22 percent
E) 13.22 percent
Transcribed Image Text:The stock of Delta Electrical, Inc., has a beta of 0.98. The market risk premium is 9 percent and the risk-free rate is 2.4 percent. What is the expected return on this stock? A) 8.91 percent B) 9.43 percent C) 10.67 percent D) 11.22 percent E) 13.22 percent
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