Purchase Solution

Market rate of return on the stock

Not what you're looking for?

Ask Custom Question

3. The common stock of BJ's Auto Clinic sells for $38.25 a share. The stock is expected to pay $1.90 per share next month when the annual dividend is distributed. BJ's has established a pattern of increasing their dividends by 2.5 percent annually and expects to continue doing so. What is the market rate of return on this stock?

Purchase this Solution
Solution Summary

The solution explains how to calculate the market rate of return on the stock

Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • Stocks : Required Rate of Return and Expected Return

    235871 Determining Required Rate of Return and Expected Return: Example A stock has a beta of 1.5, the market risk premium is 9%, and the risk-free rate is 5%. a. What is the required rate of return on this stock? b.

  • What does the Beta of a Stock Mean?

    Market rate- Risk-free rate)) Expected return on a stock = .05 +(2*(.15-.05)) Expected return on a stock = .05 +.20 Expected return on a stock = .25 The ratio of the expected return on a stock with a beta of 2 to that of a stock with a beta of 1

  • CAPM

    than the fair return and hence it is not a good buy) Calculates the beta of each stock, the expected rate of return on the market portfolio and on each stock, the fair expected rate of return on the two stocks as per CAPM

  • Calculating the market price of a stock

    516668 Calculate the market price of a stock in the given scenario. The risk-free rate of return is 3 percent, and the expected return on the market is 8.7 percent.

  • Calculating expected market retun & return on a stock

    What is the required rate of return on a stock that has a beta of 1.2?

  • Required Rate of Return

    The slope of the SML remains constant. How would this affect the required rate of return on a market portfolio and the required rate of return on a stock?

  • expected return on a stock with a beta=2.0 twice

    This solution is comprised of a detailed explanation to answer what is the expected return on a stock with a beta=2.0 twice the expected return on a stock with a beta.

  • Rate of Return using SML

    Millar Motors has a beta of 1.30 and an expected dividend growth rate of 5.00% per year. The T-bill rate is 3.00%, and the T-bond rate is 6.00%. The annual return on the stock market during the past 3 years was 15.00%.

  • Calculating the Beta and Required Rate of Return

    Risk free rate=rf=6% Market premium=rp=5% CAPM model gives us Required rates of return=risk free rate+beta*market premium Required rate of return on stock X=12.74% Required rate of return on stock Y=9.25% c.

  • Expected Return

    53635 Expected return on market protfolio Suppose the expected return on the market portfolio is 13.8 %and the risk free rate is 6.4%. Solomon Inc. stock has a beta of 1.2. Assume the capital-asset-pricing model holds. A.

View More Related Solutions