What is the expected rate of return on a stock that has a beta of 1.48 if the ma

Question

What is the expected rate of return on a stock that has a beta of 1.48 if the market risk premium is 8.0 percent and the risk-free rate is 3.3 percent?

14.21 percent

15.14 percent

11.13 percent

13.28 percent

You own a $38,000 portfolio that is invested in a risk-free security and Stock A. The beta of Stock A is 2.77 and the portfolio beta is 1.28. What is the amount of the investment in Stock A?

$14,920

$17,560

$18,380

$20,120

Excelor stock is expected to pay $3.00 per share as its next annual dividend. The firm has a policy of increasing the dividend by 11.0 percent annually. The stock has a market price of $13.65 and a beta of 2.8. The market risk premium is 8.56 percent and the risk-free rate is 4.90 percent. What is the cost of equity?

31.31 percent

30.27 percent

30.92 percent

29.84 percent

12.40 percent

13.01 percent

8.27 percent

9.21 percent

What is the expected rate of return on a stock that has a beta of 1.48 if the market risk premium is 8.0 percent and the risk-free rate is 3.3 percent?

Explanation / Answer

Answer:

Calculation of expected rate of return :

Expected rate of return = Risk free rate + beta * Market Risk premium

=3.3% + 1.48 *8%

= 15.14%

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