Question
A share is quoted at Rs. 60. An investor expects the
company to pay a dividend of Rs. 3 per share, one year from now. The expected price of share after one year is Rs. 78.50. If the beta of the share is 1.5, the risk free rate is 6% and the market risk premium is 10%, what would be the required rate of return?Solution
To calculate the required rate of return, we can use the Capital Asset Pricing Model (CAPM): Required Rate of Return (Cost of Equity) = Risk-Free Rate + Beta * Market Risk Premium Given values: Beta (β) = 1.5 Risk-Free Rate = 6% Market Risk Premium = 10% Required Rate of Return = 6% + 1.5 * 10% Required Rate of Return = 6% + 15% Required Rate of Return = 21% So, the required rate of return is 21%. The answer is b. 21%.
79.79% of 299.87 - 54.67% of (39.982 - 9.822 ) = ? - 19.92 × 199.98
20.57 ×28.04 ÷ ? + 254 = 429.06
What approximate value will come in place of the question mark (?) in the following question? (Note: You are not expected to calculate the exact value.)...
20.22% of (74.9 × 6.01) + 69.97 =?Â
- What approximate value will come in place of the question mark (?) in the following question? (Note: You are not expected to calculate the exactvalue.)
31.98% of 224.99 = 24.98% of ? + 9.91% of 499.99
2.51% of 800 - 3.97% of 250 = ?
Monthly income of P is Rs.10000 and his monthly savings is Rs.2200. If his monthly income is decreased by 30% and monthly expenditure is decreased by 20...
- What approximate value will come in place of the question mark (?) in the following question? (Note: You are not expected to calculate the exact value.)
(48/16)2 × 50/50 ÷ 50/800 = ? Â
