How much is the market require earn risk premium and the


The stock return has a yearly standard deviation of 9%; that of the market is 17.7%. The shareholders 7.52% return on their investments in the company as an opportunity cost. The T-bill is expected to 5%, and the S&P500 Index promises 12% market return for the investors. How much is the market require earn risk premium and the corporate risk premium? Determine the correlation coefficient between the stock and the market index.

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Financial Management: How much is the market require earn risk premium and the
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