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Elis [28]
3 years ago
14

Assume that the risk-free rate is 3.5% and the market risk premium is 6%. 1. What is the required return for the overall stock m

arket? Round your answer to two decimal places.2. What is the required rate of return on a stock with a beta of 2.3? Round your answer to two decimal places.
Business
1 answer:
Radda [10]3 years ago
6 0

Answer:

9.5 %

17.3%

Explanation:

The market required rate of return = risk free rate + ( Market Beta × Market risk premium)

= 3.5% + (1 × 6%) = 9.5%

The stock required rate of return = 3.5% + (2.3 × 6%) = 0.173 = 17.3%

I hope my answer helps you

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APV and WACC are similar in that they reflect the tax benefit of leverage.

<h3>How to illustrate the information?</h3>

It should be noted that the adjusted present value (APV) is used to value a project.

The weighted cost of capital (WACC) implies the rate at which a company is expected to pay all its security holders in order to finance its assets.

In conclusion, APV and WACC are similar in that they reflect the tax benefit of leverage.

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2 years ago
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Complete Question:

An investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under NASAA rules, the investment adviser:

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Cumulative sums, often known as running totals, are used to show the total sum of data as it grows over time (or any other series or progression). This allows you to see the entire contribution of a specific measure across time.

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Answer:

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