Business, 07.12.2019 00:31 kayleetruman

Henessey markets has a growth rate of 4.8 percent and is equally as risky as the market. the stock is currently selling for $17 a share. the overall stock market has a 10.6 percent rate of return and a risk premium of 8.7 percent. what is the expected rate of return on this stock?

Answers: 3

Show answers

Answers

Answer from: harleycochran2ovyt3n

ER(P) = Rf + β(Rm-Rf)

ER(P) = 1.9 + 1(10.6-1.9)

ER(P) = 1.9 + 1(8.7)

ER(P) = 10.6%

Explanation: In this question, CAPM will be used in determining the expected return of the stock. The risk free rate was not given but it was derived from the difference between overall stock market return and risk-premium ie 10.6%-8.7%, which is equal to 1.9%. In addition, the beta of the stock is 1, which corresponds to market beta. The application of the stated figures in the CAPM formula gives an expected return of 10.06%.

Answer from: Quest

Wrigley juicy fruit

Answer from: Quest

explanation:

Another question on Business

Business, 22.06.2019 19:00

When making broccoli cream soup, the broccoli and aromatics should be a. burned. b. simmered. c. puréed. d. sweated.

Answers: 2

Answer

Business, 22.06.2019 19:30

John's pizzeria and equilibrium john is selling his pizza for $6 per slice in an area of high demand. however, customers are not buying his pizza. using what you learned about the principles of equilibrium, write three to four sentences about how john could solve his problem.

Answers: 1

Answer

Business, 22.06.2019 19:50

Bulldog holdings is a u.s.-based consumer electronics company. it owns smaller firms in japan and taiwan where most of its cell phone technology is developed and manufactured before being released worldwide. which of the following alternatives to integration does this best illustrate? a. venture capitalism b. franchising c. joint venture d. parent-subsidiary relationship

Answers: 2

Answer

Business, 22.06.2019 20:00

During the month of march 2017, weimar world, a tax-preparation service, had the following transactions. * billed $496,000 in revenues on credit * received $164,000 from customers' accounts receivable * incurred expenses of $194,000 but only paid $87,700 cash for these expenses * prepaid $32,220 for computer services to be used next month what was the company's accrual basis net income for the month? select one: a. $302,000 b. $264,080 c. $ 41,860 d. $408,300 e. none of the above

Answers: 3

Answer

You know the right answer?

Henessey markets has a growth rate of 4.8 percent and is equally as risky as the market. the stock i...

Questions