I’m trying to study for my Accounting course and I need some help to understand this question.
Answer the following questions providing all work. It is best to do these problems in Excel and then to paste them into this document. This is a detailed and important project in this course. The answers should be carefully verified before submission. Start early and take the time to do a good job. .
6)Compute the risk premium for the stock of Omega Tools if the risk free rate is 6%, the expected market return is 12%, and Omega’s stock has a beta of .8.
7)Elephant Company common stock has a beta of 1.2. The risk-free rate is 6% and the expected market rate of return is 12%. Determine the required rate of return on the security.