Here are data on two companies. The T-bill rate is 4.6% and the market risk premium is 8.9%.
Company $1 Discount Store Everything $5
Forecast return 15 % 14 %
Standard deviation of returns 22 % 24 %
Beta 1.4 1.0
Required:
What would be the fair return for each company, according to the capital asset pricing model (CAPM) ?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Here are data on two companies. The T-bill rate is 4.6% and the market risk premium is 8.9%. Company $1 Discount Store Everything $5 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
A property is purchase for $15 million. Financing is obtained at a 75% loan-to-value ratio with total annual payments of $1,179,000. The property produces an NOI of $1,400,000.
Answers (1)
You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio RP σP βP X 12.0 % 33 % 1.95 Y 11.0 28 1.25 Z 7.3 18 0.60 Market 11.4 23 1.00 Risk-free 6.
Answers (1)
involves working with stakeholders to create the document that formally authorizes a project. a. Developing the project charter b. Developing the preliminary project scope statement c. Performing integrated change control d.
Answers (1)
Information is power. Withholding or distorting project information is aviable and potentially useful approach to increase power for the project manager. T/F
Answers (1)
Which is a primary activity in Porter's value chain model? A. finance B. procurement C. human resources D. outbound logistics
Answers (1)
New Questions in Business
Bustillo Inc. is working on its cash budget for March. The budgeted. 3 Bustillo Inc. ts working on ts cash budget for March. The budgeted beginning cash balance is $40,000.
Answers (1)
Transfer payments are: a. a redistribution of funds from one individual to another individual in the economy. b. another term for government taxation. c. a means by which government raises funds. d. counted in gdp.
Answers (1)
A corporation owns many acres of timber, which it acquired three years ago, and which has a $120,000 basis. The timber was cut last year for use in the corporation's business. The FMV of the timber on the first day of last year was $270,000.
Answers (1)
Which of the following is an inequality or equation that expresses a restriction in a mathematical model? a. Decision variableb. Parameterc. Objective functiond. Constrainte. None of these
Answers (1)
Vent, Inc. reported net income of $770,000 for 2018. Vent sold 15,000 shares of treasury stock acquired in a previous year on July 1 and 15,000 new shares on November 1. At year-end, 180,000 shares were outstanding.
Answers (1)