If you're trying to figure out your minimum rate of return, it's how much money you want to make.
Benjamin Graham's value investing formula used the return rate of US Treasury notes, because if you couldn't make at least the 7% or whatever they returned, you were better off buying those notes, because the US government is very likely to pay you back.
These days, you probably want to earn more than 2%. Remember to calculate the taxes you expect to pay and the rate of inflation, as well as any fees you have to pay for your investment.
I use a return rate of 12% for myself, but I am an aggressive investor.
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?
Require Rate of Return is formulated as: Riskfree Rate + Beta(Risk Premium) Required Rate of Return = 4.25 + 1.4 (5.50) = 11.95%
13.3
then it is a good buy =-) To put it simply.
4.25 + 1.4(5.5) = 11.95 = required rate of return the correct answer is: 4.25 + 1.4 (5.50-4.25) = 21.75
An increase in a firm's expected growth rate would normally cause its required rate of return to
expected rate of return
Question 4 How does the cost of debt differ from the required rate of return for bondholders?
Question 4 How does the cost of debt differ from the required rate of return for bondholders?
Relationship btwn an investor's required rate of return and value pf security
relationship between WACC and 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?
Require Rate of Return is formulated as: Riskfree Rate + Beta(Risk Premium) Required Rate of Return = 4.25 + 1.4 (5.50) = 11.95%
The value of the required rate of return would be the same percentage. The investment will not be purchased by a buyer if the percentage is not fixed, solidifying the rate of return when the investment is sold. The value may be more, however, but not less.
13.3
required rate of return is the 'interest' that investors expect from an investment project. coupon rate is the interest that investors receive periodically as a reward from investing in a bond
Difference enters bond's coupon interest rate the current yield y bondholder's required rate of return?