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Andrej [43]
2 years ago
11

Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 4.5%, and the market is in equilib

rium. (That is, required returns equal expected returns.) What is the market risk premium (rM - rRF)
Business
1 answer:
seraphim [82]2 years ago
3 0

The market risk premium of Fund P will be 5.5%.

<h3>How to calculate the market risk premium?</h3>

It should be noted that as per CAPM, the return in stock will be:

= Risk free rate + Beta × Market risk premium

8.90% = 4.5% + 0.8 × Market risk premium.

Market risk premium = 5.5%

In conclusion, the market risk premium of Fund P will be 5.5%.

Learn more about market risk premium on:

brainly.com/question/17135853

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Further From Center has 12,100 shares of common stock outstanding at a price of $55 per share. It also has 310 shares of preferr
Molodets [167]

Answer:

Market value of common stocks = 12,100 x $55 = $665,500

Market value of preferred stock = 310 x $91       = $28,210

Market value of bonds                = 370 x $2,230 = $825,100

Market value of the company                                   $1,518,810

Capital structure weight of preferred stocks

= $28,210/$1,518,810

= 0.0186

The correct answer is A

Explanation:

In this question, we need to calculate the market value of the company, which is the aggregate of market value of equity, market value of preferred stocks and market value of bond. The capital structure weight of preferred stock is the ratio of market value of preferred stock to market value of the company.

3 0
3 years ago
what type of leadership focuses on alternative methods of conducting organizational change processes.
KATRIN_1 [288]

Answer: Organizational change leader

Explanation:

The organizational change leader is the big hand for controlling the changes in the organization and management.  This involves the change centric leadership. The leader should not look upon the upward organizational hierarchy to seek help instead must take actions and must implement them on others. Empowering the stakeholders. Managing the team discussions and working ethics and credibility.

3 0
3 years ago
Kilt Company had the following information for the year:
ch4aika [34]

Answer:

The applied overhead is $231,000

Explanation:

The computation of the applied overhead is shown below:

= Predetermined overhead rate × direct labor hour

= $42 × 5,500 hours

= $231,000

Since the predetermined overhead rate is given in the question, so there is no need to re calculate it.

And, the other items which are mentioned in the question are not considered in the computation part. Hence, these items would be ignored

5 0
2 years ago
baird purchased a landlocked tract from carr on the condition that carr grant baird an easement across carr's property to a road
gtnhenbr [62]

Dole has a legal right of way through Carr's property because the easement follows the land and not the owner.

The Indian Easements Act of 1882's Section 4 defines the term "easement." According to Section 4's guidelines, an easement right is a privilege that a landowner or occupier has over another piece of property that is not his own and that is intended to allow for the beneficial use of the property. Because an occupier or owner cannot completely enjoy his own property without this privilege, it is allowed. It also includes the right to take action or continue to take action in relation to or with regard to some other land, other than his own, for the pleasure of his own land.

To learn more about Easement across property here

brainly.com/question/14100294

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5 0
1 year ago
What is the formula for calculating simple interest?
lakkis [162]

Explanation:

the formulary for calculating simple interest is

simple interest= principal×rate×time/100

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