Zoom stock has a beta of 1.46. The risk-free rate of return is 3.07 percent and...
Zoom stock has a beta of 1.46. The risk-free rate of return is
3.07 percent and the market rate of return is 11.81 percent. What
is the amount of the risk premium on Zoom stock?
A) 8.09%
B) 12.76%
C) 9.59%
D) 10.25%
E) 17.24%
Homework Answers
| B) 12.76% | |
| Beta, B | 1.46 |
| Return on Market, Rm | 11.81% |
| Risk Free Rate, Rf | 3.07% |
| Risk Premium = Beta(Rm-Rf) | |
| Risk Premium = 1.46(11.81% - 3.07%) | |
| Risk Premium = 1.46 * 8.74% | |
| Risk Premium = 12.76% |
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