Calculate beta

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Question 1: Bonds Interest rate Tax rate Sales Operating costs excluding depr'n Depreciation Operating income (EBIT) Interest charges Taxable income Taxes Net income after taxes Net cash flow Check on NCF: ΔNCF = change in depreciation × tax rate 14) Assume that the market is in equilibrium and that Portfolio AB has 50% invested in Stock A and 50% invested in Stock B. Stock A has an expected return of 10% and a standard deviation of 20%. Stock B has an expected return of 13% and a standard deviation of 30%. The risk-free rate is 5% and the market risk premium, rM - rRF, is 6%. The returns of Stock A and Stock B are independent of one another, i.e., the correlation coefficient between them is zero. Calculate beta

Reference no: EM132859002

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