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faust18 [17]
1 year ago
14

asset w has an expected return of 15.7 percent and a beta of 1.75. if the risk-free rate is 3.3 percent, what is the market risk

premium?
Business
1 answer:
Marizza181 [45]1 year ago
5 0

The market risk premium is 14.12. A market risk premium in finance and economic is used to measure how much the level of risk.

A risk premium means a measure of excess return that is used by an individual to compensate being subjected to an improved degree of risk. A risk premium is the common definition being the expected risky return less the risk-free return.

To find the amount of risk premium, we can calculate it use beta of the stock formula:

Beta of the stock = (expected return - risk-free rate) ÷ risk premium

Because we need the amount of  risk premium, then it will be:

Risk premium = Beta of the stock/(expected return - risk-free rate)

Risk premium =  1.75/(15.7% - 3.3 percent)

Risk premium = 1.75/(0.157 - 0.033)

Risk premium = 1.75/0.124

Risk premium = 14.12

Thus, the market risk premium is 14.12.

Learn more risk premium, here brainly.com/question/28235630

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Answer:

Incorrect Statement about the Statement of Cash Flows:

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Explanation:

Cash dividends of $201,000 will be reported as a cash outflow in the financing activities section and not the investing activities section.

Statement of Cash Flows is broadly divided into three, the operating, investing, and financing activities sections.  The operating activities section show the cash flows from the normal business of the enterprise.  The investing activities section shows the acquisition and disposal of investments made by the company in cash.  While, the financing section shows the inflow and outflow of cash resulting from the funding of the business by stockholders and noncurrent creditors.

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3 years ago
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torisob [31]

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<h3>What is tax?</h3>

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FUTA stands for Federal unemployment tax act where you won't need to submit your tax again if your FUTA tax due for the following quarter is $500 or less until the total is $500 or higher.

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