Find undiversifiable risk of stock and beta for stock

Assignment Help Financial Management
Reference no: EM131880132

Stock X :Standard Deviation= 15% Correlation Coefficient SP 500=.75 Return Required: SP500:Standard Deviation= 25% Correlation Coefficient SP 500=1 Return Required=12% T-Bill:Standard Deviation= 0% Correlation Coefficient SP 500=0 Return Required=3.5%

1. Find undiversifiable risk of stock x?

2. Beta for stock X?

3. What is the risk premium ?

4. Required rate of return for stock X ? if expected cash flow from stock X is $50 2 years hence then what is the value of the Stock X?

Reference no: EM131880132

Questions Cloud

What is the total finance cost of this loan : Joseph is purchasing a new truck for $30,000. Joseph is making a $3,000 down payment, What is the total finance cost of this loan?
Draw a discrete cash flow diagram for this project : Draw a discrete cash flow diagram for this project. What is the future value of this project at the end of year 8?
What was your total return for the past year : what was your total return for the past year? Assume semiannual compounding.
Boundary for value of european vanilla put option : What is the lower boundary for the value of a European vanilla put option on this asset with strike price of $80?
Find undiversifiable risk of stock and beta for stock : Find undiversifiable risk of stock x? Beta for stock X? What is the risk premium ?
Discussing the type of financial exchanges that occur : Introduce the financial market to your classmates by describing it and discussing the type of financial exchanges that occur.
Company is offering choice of deals-which deal is cheaper : A car company is offering a choice of deals. You can receive $500 cash back on the purchase or a 3 percent APR, 4-year loan.Which deal is cheaper?
Estimate of the population mean examination score : What is the 95% confidence interval estimate of the population mean examination score if a sample of 200 applications provided a sample mean = 935.
Your budget for the current month using zero-based format : Using the format a monthly budget prepare your budget for the current month using a zero-based format

Reviews

Write a Review

Financial Management Questions & Answers

  Part a - performance objectivereport and monitor

part a - performance objectivereport and monitor expenditure and compare with financial plans so that recommendations

  What is the bond capital gain or loss yield-yield to call

What is the bond's yield to maturity? What is the bond's capital gain or loss yield? What is the bond's yield to call?

  Define the concept of decision management

Please define the concept of “decision management.” Please define the concept of “decision control.”  When and why is it important to separate decision management and decision control?

  Briefly discuss conceptual merits of using market rate

On January 1, 2015, RA Company issued for $537,616 its 20-year, 13% bonds that have a maturity value of $500,000 and pay interest semiannually on January 1 and July 1. Briefly discuss the conceptual merits of using the market rate as opposed to the c..

  Optimal capital structure consists

Olsen Outfitters Inc. believes that its optimal capital structure consists of 50%, What is the WACC for the last dollar raised to complete the expansion?

  Non-recognition of gain from an involuntary conversion

An apartment building with an adjusted basis of $500,000 was destroyed by a tornado on April 30, 2015. On May 10, 2015, the insurance company paid the owner $695,000. The owner reinvested $570,000 in a new apartment complex. What is the basis of the ..

  What is the present value of each of the given income stream

What is the present value of each of the following income streams? - $100 to be received at the end of each of the next three years

  Payback is the preferred financial measure

Payback is the preferred financial measure for most capital projects in smaller firms. Why?

  Explain what is meant by market efficiency

Explain what is meant by market efficiency. What is Beta? How is it related to expected return?

  What is the operating cash flow or OCF

Hailey, Inc., has sales of $19,710, costs of $9,320, depreciation expense of $1,990, What is the operating cash flow, or OCF?

  Process of preparing annual budget

Arter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. How much of the raw material should the company purchase during the year? Assume that company plans to s..

  Grow an investment to a specific amount of money

Which of the following statements about calculating the number of years needed to grow an investment to a specific amount of money is true?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd