Nuka Cola has a beta of 0.85. If the risk-free rate of return is 4% and the expected return on the market is 9% then, according to CAPM, the expected return on Nuka Cola stock is:
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Nuka Cola has a beta of 0.85. If the risk-free
the market is 9% then, according to
a. 4.25%
b. 8.25%
c. 9.88%
d. 15.05%
e. 24.25%
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- Company A has a beta of 0.70, while Company B's beta is 0.95. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return? Select the correct answer. a. 1.61% b. 1.63% c. 1.65% d. 1.67% e. 1.69%Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 8.25%, and the risk-free rate is 4.30%. What is the required rate of return on the market? a. 7.51% b. 7.46% c. 7.56% d. 7.61% e. 7.66%Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 8.50%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.) Select the correct answer. a. 7.71% b. 7.62% c. 7.65% d. 7.68% e. 7.74%
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- Assume that the risk-free rate of return is 4% and the market risk premium (i.e., Rm - Rf) is 8%. If use the Capital Asset Pricing Model (CAPM) to estimate the expected rate of return on a stock with a beta of 1.28, then this stock's expected return should be -- A) 10.53% B) 14.24% 23.15% 6.59%Zacher Co.'s stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's required rate of return? a. 11.36% b. 11.65% c. 11.95% d. 12.25% e. 12.55%Stock A has a beta of 1.30, and its required return is 11.35%. Stock B's beta is 0.80. If the risk-free rate is 2.90%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.) Do not round your intermediate calculations. a. 8.10% b. 6.50% c. 7.56% d. 8.45% e. 8.77%
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