How much is the market risk premium and the corporate risk


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

Request for Solution File

Ask an Expert for Answer!!
Financial Management: How much is the market risk premium and the corporate risk
Reference No:- TGS02738671

Expected delivery within 24 Hours