1. If the risk-free rate is 7.40 percent and the risk premium is 6.4 percent, what is the required return? (Round your answer to 1 decimal places.)
2. If the risk-free rate is 5.50 percent and the risk premium is 7.5 percent, what is the required return? (Round your answer to 1 decimal places.
3. If the risk-free rate is 5.50 percent and the risk premium is 7.5 percent, what is the required return? (Round your answer to 1 decimal places.
4. Nanometrics, Inc., has a beta of 3.11. If the market return is expected to be 12.75 percent and the risk-free rate is 5.50 percent, what is Nanometrics’ required return? (Round your answer to 2 decimal places.)
5. Suppose Paccar’s current stock price is $78.16 and it is likely to pay a $4.18 dividend next year. Since analysts estimate Paccar will have an 12.4 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)
6. A manager believes his firm will earn a 17.00 percent return next year. His firm has a beta of 1.24, the expected return on the market is 15.00 percent, and the risk-free rate is 7.00 percent.
Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.)
Hastings Entertainment has a beta of 0.37. If the market return is expected to be 15.20 percent and the risk-free rate is 7.20 percent, what is Hastings’ required return? (Round your answer to 2 decimal places.)