Reference no: EM13929006
Stock has a required return of 12%; the risk-free rate is 3.5%; and the market risk premium is 6%. What is the stock's beta? Round to two decimal places.
If the market risk premium increased to 7%, what would happen to the stock's required rate of return? Assume the risk-free rate and the beta remain unchanged.
A) If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium.
B) If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
C) If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
D) If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium.
E) If the stock's beta is equal to 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
What will the new stock's required rate of return will be %. Round to two decimal places.
Determine the reorder point
: Alexis Co. uses 800 units of a product per year on a continuous basis. The product has a fixed cost of $50 per order, and its carrying cost is $2 per unit per year. determine the average level of inventory (365-day year to calculate daily usage) dete..
|
Cost of equity is incorrect percent
: Stock in Country Road Industries has a beta of .85. The market risk premium is 8 percent, and T-bills are currently yielding 5 percent. The company's most recent dividend was $1.60 per share, and dividends are expected to grow at a 6 percent annual r..
|
Directly produce any sales but will reduce operating costs
: Thornley Machines is considering a 3-year project with an initial cost of $690,000. The project will not directly produce any sales but will reduce operating costs by $405,000 a year. The project will require $17,000 in extra inventory for spare part..
|
What amount would liken report on the statement
: What amount would Liken report on the statement of cash flows related to the sale of the land?
|
Assume the risk-free rate and the beta remain unchanged
: Stock has a required return of 12%; the risk-free rate is 3.5%; and the market risk premium is 6%. What is the stock's beta? If the market risk premium increased to 7%, what would happen to the stock's required rate of return? Assume the risk-free ra..
|
Explain the basis of any liability in the tort of negligence
: In relation to the energy drinks that were described in the segment, explain the basis of any liability in the tort of negligence that the manufacturers of those drinks might have to Australian consumers.
|
Is security mechanisms and practices
: Organizations around the world often assess their IS security mechanisms and practices by using the Trusted Computer System Evaluation Criteria (TCSEC) or Information Technology Security Evaluation Criteria (ITSEC). The two standards are similar, tho..
|
How does vaccine distribution relate to key operations
: How does vaccine distribution relate to key operations and supply chain management questions including: quality management, new product development and forecasting
|
Ownership of the risk to another party
: Q1. ____ involves allocating ownership of the risk to another party. Q2. A project manager can chart the probability and impact of risks on a ____.
|