8-1 EXPECTED RETURN A stock's returns have the following distribution:

Calculate the stock's expected return, standard deviation, and coefficient of variation.

8-3 REQUIRED RATE OF RETURN Assume that the risk-free rate is 6% and the expected return on the market is 13%. What is the required rate of return on a stock with a beta of 0.7?

8-5 BETA AND REQUIRED RATE OF RETURN A stock has a required return of 11%, the risk-free rate is 7%, and the market risk premium is 4%.
a. What is the stock's beta?
b. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged.

8-7 PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $4 million investment fund. The fund consists of four stocks with the following investments and betas:

If the market's required rate of return is 14% and the risk-free rate is 6%, what is the fund's required rate of return?

8-11 CAPM AND REQUIRED RETURN Calculate the required rate of return for Manning Enterprises assuming that investors expect a 3.5% rate of inflation in the future. The real risk-free rate is 2.5%, and the market risk premium is 6.5%. Manning has a beta of 1.7, and its realized rate of return has averaged 13.5% over the past 5 years.

... a. Assume that the required return on a given stock is 15%. ... If the required return on this preferred stock is 6.5%, at what price should the stock sell? ...

... At zero growth rate the price = Dividend/Required return = 8/10% = $80 With a growth rate of 5%, the price becomes Price = D1/(Required return - Growth rate ...

Woidtke: Required Rate of Return on the Company's Stock. ... What is the required rate of return on the company's stock? r=D1/P+g. D1=D0*(1+g)=1.00*(1+10%)=1.10. ...

... 5. BOND VALUE AND CHANGING REQUIRED RETURNS Midland Utilities has outstanding bonds that will ... a. Find the value of the [bond if the] required return is (1) 11 ...

... Using CAPM, the required return is calculated as Kj= RF+ [bj x (km-RF)] where RF = risk free rate = 10 year US Treasury rate = 3.49% (km-RF) = market risk ...

... it is positioned in line with the returns expected by ... to describe the relation between risk and return on a ... Accuray's cost of equity using APT, we need to have ...