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Mandarinka [93]
3 years ago
11

The common stock of United Industries has a beta of 1.34 and an expected return of 14.29 percent. The risk-free rate of return i

s 3.7 percent. What is the expected market risk premium?
Business
1 answer:
n200080 [17]3 years ago
8 0

Answer:

7.90%

Explanation:

For this question, we use the Capital Asset Pricing Model formula that is presented below:

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

where,

The Market rate of return - Risk-free rate of return) is also known as the market risk premium

So, the expected market risk premium is

14.29% = 3.7% + 1.34 × expected market risk premium

10.59% = 1.34 × expected market risk premium

So, the expected market risk premium is 7.90%

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kupik [55]

Answer:

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--

Hope this Helps!

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Which of the following would cause a "Prior Period Adjustment" to be reported on the 2025 Statement of Retained Earnings?
Fynjy0 [20]

Answer:

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A. Failure to Accrue Revenue at 12/31/24, but not 12/31/21 Depreciation Overstatement.

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Pursuant to a complete liquidation, Carrot Corporation distributes to its shareholders real estate held as an investment (basis
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Answer:

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