Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. suppose also that the expected return required by the market for a portfolio with a beta of 1 is 7.0%. according to the capital asset pricing model: a. what is the expected return on the market portfolio? (round your answer to 1 decimal place.) b. what would be the expected return on a zero-beta stock? suppose you consider buying a share of stock at a price of $50. the stock is expected to pay a dividend of $5 next year and to sell then for $52. the stock risk has been evaluated at β = –0.5. c-1. using the sml, calculate the fair rate of return for a stock with a β = –0.5. (round your answer to 1 decimal place.) c-2. calculate the expected rate of return, using the expected price and dividend for next year. (round your answer to 2 decimal places.)

Michigan mattress company is considering the purchase of land and the construction of a new plant. the land, which would be bought immediately (at t = 0), has a cost of $100,000 and the building, which would be erected at the end of the first year (t = 1), would cost $500,000. it is estimated that the firm's afterminustax cash flow will increase by $100,000 starting at the end of the second year, and that this incremental flow would increase at a 10 percent rate annually over the next 10 years. what is the approximate payback period?

Which of the following statements is correct? a. two firms with identical sales and operating costs but with different amounts of debt and tax rates will have different operating incomes by definition. b. free cash flow (fcf) is, essentially, the cash flow that is available for interest and dividends after the company has made the investments in current and fixed assets that are necessary to sustain ongoing operations. c. retained earnings as reported on the balance sheet represent cash and, therefore, are available to distribute to stockholders as dividends or any other required cash payments to creditors and suppliers. d. if a firm is reporting its income in accordance with generally accepted accounting principles, then its net income as reported on the income statement should be equal to its free cash flow. e. after-tax operating income is calculated as ebit(1 - t) + depreciation.

Acrosswalk_when there are no pavement markings.