What is the implied beta coefficient of the stock

Assignment Help Financial Management
Reference no: EM13730373

Assume that the risk-free rate is 8 percent, the required rate of return on the market (or an average-risk stock) is 13 percent, and the required rate of return on Acme Healthcare stock is 15 percent. What is the implied beta coefficient of the stock?

a. 1.5

b. 1.4

c. 1.2

d. 1.0

e. 0.8

Reference no: EM13730373

Questions Cloud

Semi-annually and the market yield : Find the price of the following Bond X The interest rate on the bond is 8%, paid semi-annually and the market yield is 9%. The maturity is 10 years
Yield to maturity and required returns : The Brownstone Corporation's bonds have 4 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. What is the yield to maturity at a current market price of $827?
What is the stocks expected rate of return : Managed Healthcare's current stock price is $25, its next per share dividend (assumed to be paid annually) is forecasted to be $1.00, and analysts expect the company to grow at a constant annual rate of 10 percent. What is the stock's expected rate o..
What is the value of gold coasts stock : Gold Coast Health System just paid an annual dividend of $1.50, which is expected to grow at a constant rate of 5 percent per year. If the current required rate of return is 15 percent, what is the value of Gold Coast's stock?
What is the implied beta coefficient of the stock : Assume that the risk-free rate is 8 percent, the required rate of return on the market (or an average-risk stock) is 13 percent, and the required rate of return on Acme Healthcare stock is 15 percent. What is the implied beta coefficient of the stock..
What is the stocks value if investors require rate of return : Assume that US Med ware is a constant growth company whose last dividend per share (D0) was $1.00. The dividend is expected to grow at a constant rate of 8 percent per year. What is the stock's value if investors require a 15 percent rate of return?
Valuing preferred stock : E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8 percent on this stock, how much should..
Interest rate risk : Both Bond Bill and Bond Ted have 7 percent coupons, make semi-annual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percen..
Non constant Growth Stock Valuation : Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $0.60 coming 4 years from today.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the default premium on this bond

A zero coupon bond has a beta of 0.15 and promises to pay $1,000 next year with a probability of 97%. If the bond defaults, it will pay nothing. One year Treasury securities are yielding 5%, and the equity premium is 7%. Refer to the information abov..

  What are the companys days sales in receivables

A company has net income of $265,000, a profit margin of 9.3 percent, and an accounts receivable balance of $145,300. Assuming 80 percent of sales are on credit, what are the company’s days’ sales in receivables?

  Internal growth rate and sustainable growth rate

Consider the results. If the chosen firm grows at its internal growth rate, increasing assets only with its retained earnings, how will this likely affect its WACC? Show calculations.

  Balanced scorecard dear sir madamkindly attached find the

dear sir madam ltbrgt ltbrgtkindly attached find the assignment that i need 100 plagiarism free please let me know

  When a firm is evaluating the introduction of a new product

The depreciation is best defined as the: A university converted the bottom 3 floors of an apartment building they own to classrooms. The option that is forgone so that the university can utilize it for classroom is: When a firm is evaluating the intr..

  Question what per visit price must be set for this service

what per visit price must be set for this service to break even? to earn an annual profit of

  Command contains different stratification levels

A clearly demarcated chain of command contains different stratification levels. This concept is evident in a ________. A: Conferred membership status B: Status HIerarchy C: Position level D: Role Status

  What profit margin must the firm achieve

A firm has a debt-equity ratio of 0.45 and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at 1.25.If the firm would like to have a sustainable growth with a value of 6 percent per year, what profit margin must t..

  Suppose that the assets of a bank consist of 500 million of

suppose that the assets of a bank consist of 500 million of loans to bbb-rated corporations. the pd for the

  Present value for the following series of future cash flows

Find the net present value for the following series of future cash flows, assuming the company's cost of capital is 6.5%. The initial outlay is $450,200.

  Find a firm that issued debt and used those proceeds

There is a debate about stock repurchases whether they are liked by investors or not. Some investors like it because of tax treatments etc. and some other don't because of changes in ownership etc.

  Afford to make monthly payments

You want to borrow $36,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $750, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60-month APR loan?

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