Managerial Finance

jbru · #1 Jul 14, 2007, 07:36 AM

Can someone show me how to calculate the following: risk-free rate of return that is 15.51% based on expected inflation premium of 2.54%. The expected return on the market is 12.8%. What is the required rate of return for common stock that has a beta of 1.35?

Hermansherman · Jul 16, 2007, 04:48 AM

Quote:

Originally Posted by jbru

Can someone show me how to calculate the following: risk-free rate of return that is 15.51% based on expected inflation premium of 2.54%. The expected return on the market is 12.8%. What is the required rate of return for common stock that has a beta of 1.35?

Do you have a typo in your question?
How can the risk-free rate be 15.51% if the expected return on the market is 12.8%?
Herman



At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to: Get free answers from experts in any of our 300+ topics. Accept money for answers that you provide. Communicate privately with other members (PM). See fewer ads. Sign Up!