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Risk free rate is 5 and the market risk premium is 6 What is the expected return for the overall stock market What is the required rate of return on a stock that has a beta of 1.2?
Wiki User
∙ 15y ago
Expected return= risk free rate + Risk premium = 11 rate of return on stock= Riskfree rate + beta x( expected market return- risk free rate)
Wiki User
∙ 15y ago
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If beta is 1.8 risk free rate is 5 and expected market risk premium is 12 what is the cost of equity?
5.216 according to CAPM
What is the current market risk premium?
Banks are currently using 8% market risk premium. Data as of Feb, 2013.
If the required rate of return is 11 the risk free rate is 7 and the market risk premium is 4 what is the beta coefficient?
the beta is 1 the beta is 1
What rates does PNC offer on their money market accounts?
PNC offers higher interest rates on high balance amounts through their Premium Money Market account.The minimum amount required to open an account is $100.
Cooley Company's stock has a beta of 1.32 the risk-free rate is 4.25 percent and the market risk premium is 5.50 percent. What is the firm's required rate of return?
11.51%
The market risk premium is measured by?
The market risk premium is measured by the market return less risk-free rate. You can calculate the market risk premium as market risk premium is equal to the expected return of the market minus the risk-free rate.
If the required rate of return is 11 the risk free rate is 7 and the market risk premium is 4 If the market risk premium increased to 6 percent what would happen to the stocks required rate of return?
If the required rate of return is 11 the risk free rate is 7 and the market risk premium is 4 If the market risk premium increased to 6 percent what would happen to the stocks required rate of return?
If the market risk premium were to increase everything else beign equal the value of common stock would do what?
Value of the common stock will go down.As market becomes riskier market participants adjust expected risk premium and start to demand higher returns, consequently they begin to sell stocks as they do not satisfy their newly adjusted expected risk premium. As a result stock price goes down.
If beta is 1.8 risk free rate is 5 and expected market risk premium is 12 what is the cost of equity?
5.216 according to CAPM
If the risk free rate is 10 percent and the market risk premium is 5 percent market determined beta is 1.8 what is the required rate of return?
RoR = Rf + beta x Rp where, RoR = Required Rate of return Rf = Risk free Rate Rp = Risk Premium so Ror - 19%
Expected return for an asset equals its required return?
This should be correct in a perfect market. Not true usually as assets are often mis priced. Expected return is the return/discount that market is using to get the value of the asset while required return is the discount / return that gets you the true intrinsic value of an asset
If beta coefficient is 1.4 and the risk free rate is 4.25 and the market risk premium is 5.50 what is the required rate of return?
Require Rate of Return is formulated as: Riskfree Rate + Beta(Risk Premium) Required Rate of Return = 4.25 + 1.4 (5.50) = 11.95%
What will happen to the expected return on a stock with a beta of 1.5 and a market risk premium of 9 percent if the Treasury bill yield increases from 3 percent to 5 percent?
2.0%
What is the current market risk premium?
Banks are currently using 8% market risk premium. Data as of Feb, 2013.
What is the market cap for Dow 30 Premium DPD?
As of July 2014, the market cap for Dow 30 Premium (DPD) is $194,882,216.61.
What is the market cap for Dow 30 Premium DPO?
As of July 2014, the market cap for Dow 30 Premium (DPO) is $385,818,522.05.
If the inflation premium for a bond goes up the price of the bond?
The price of the bond decreases; the inflation premium would increase the market interest rate, which in bond valuation is located in the denominator, and the coupon payment rate is located in the numerator. When calculating the NPV of future coupon payments, as the denominator or market interest rate + inflation premium increases, the Net Present Value of future coupon payments decreases and the overall value of the bond decreases as well. The price of the bond decreases; the inflation premium would increase the market interest rate, which in bond valuation is located in the denominator, and the coupon payment rate is located in the numerator. When calculating the NPV of future coupon payments, as the denominator or market interest rate + inflation premium increases, the Net Present Value of future coupon payments decreases and the overall value of the bond decreases as well.
