Historical return on stock market and risk-free rate
The market risk premium is difference among the historical return upon the stock market and the risk-free rate, for yearly. Why is this negative for some years?
Expert
The market risk premium (needed return) is not the difference among the historical return of the stock market and that of fixed-income. For illustration, the historical return of stock market over fixed-income in the United States fluctuates among 3 and 15 percent according to the time period referenced. The needed equity premium is the additional return an investor needs of the shares above the risk-free fixed-income. This does not have similar value for each investor and this is not observable. Thus, we cannot say this is a characteristic parameter of international or national economy.
ABC Corp is issuing a 10-year bond with a coupon rate of 7 %. The interest rate for similar bonds is at present 9 %. Supposing annual payments, what is the current value of the bond? (Round to the closest dollar.) (a) $872 (b) $1,066 (c) $990 (d) $945. Q : Calculated betas when they give Calculated betas give different information if they are acquired by using weekly, monthly or daily data.
Calculated betas give different information if they are acquired by using weekly, monthly or daily data.
ABC Corporation stock sells at $27 per share and its dividend per share is $1.20. ABC has price-earnings ratio of 16. The company contains $40 million worth of bonds, selling at par, with 8.5% coupon. The EBIT of ABC is of $12 million and its tax rate is 30%. Calculat
Workpapers: In finance world, work papers are documents which are created during the procedure of computing the financial records of a business or individual. The accounting professional which is tasked with examining the book-keeping of a business mi
Define the term Vanilla Bonds regarding Corporate Bonds?
I have a doubt about the Enron case. How could this prestigious investment bank advice investing while the quotations of the shares were falling?
Explain the result of volatility structure.
Stanley invested in a municipal bond which promised an annual yield of 6.7 %. The bond pays coupons twice a year. What is the effective annual yield (abbreviated as EAY) on this investment? (1) 13.4% (2) 6.81% (3) 6.70% (4) None of the above
What is the current example of a value company and would you buy it as an investment. Why or why not?
XYZ Company is planning to acquire a machine which will cost $200,000, that will last for 4 years. The company employs straight-line depreciation. The tax rate of XYZ is 35% and the proper discount rate in this situation is 12%. (A
18,76,764
1942018 Asked
3,689
Active Tutors
1456101
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!