Risk and Return.

Investors need to know how much risk they have to take to confidently expect a certain percentage return. Likewise, managers want to know what return shareholders require so that they can decide how to meet those expectations.

A minimum of 275 words:

Select 2–3 of the topics below and discuss how they each influence financial decisions regarding risk and return

  • The capital asset pricing model (CAPM)
  • The constant–growth model
  • – Compute forward-looking expected return and risk
  • – Risk premiums


2.Marginal corporate tax rates using, the corporate tax schedule given in Table 2.1 perform the following.
a. Find the margin tax rate for the following levels of corporate earnings before taxes $ 15,000, $60,000, $ 90,000, $200,000, $400,000, $1million; and $ 20 million.
b. Plot the marginal tax rates ( measure on the y axis ) against the pretax income levels ( measure on the x axis ) . Explain the relationship between these variables.

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