Accounting question The stock of Delta Electrical, Inc., has a beta of 0.98. The market riskpremium is 9 percent and the risk-free rate is 2.4 percent. What is theexpected return on this stock?A) 8.91 percentB) 9.43 percentC) 10.67 percentD) 11.22 percentE) 13.22 percent

The question requires the calculation of the expected return of stock.The expected return is the…

Answered: The stock of Delta Electrical, Inc.,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 7P

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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