What is the stock beta

Assignment Help Accounting Basics
Reference no: EM131754532

Question - Beta and required rate of return A stock has a required return of 11 percent; the risk-free rate is 7 percent; and the market risk premium is 4 percent.

a. What is the stock's beta?

b. Is the market risk premium increased to 6 percent, what would happen to the stock's required rate of return?

Assume the risk-free rate and the beta remain unchanged.

Reference no: EM131754532

Questions Cloud

Determine the optimum order quantity in given case : A company requires a particular item from an outside supplier for its production process. Annual demand for the item is 3000 units.
What is the fund required rate of return : If the market's required rate of return is 14 percent and the risk-free rate is 6 percent, what is the fund's required rate of return
Compute the slack time for the project : Explain the project idea and its objective - Define the dependency between the project activities and choose duration for each activity
Review problem related to place combined orders for item : A local authority operates over a large geographical area. The Education Department is responsible for ensuring that stocks of a certain item are kept.
What is the stock beta : What is the stock's beta? Is the market risk premium increased to 6 percent, what would happen to the stock's required rate of return
Welcome to kaizen consulting : Welcome to Kaizen Consulting, Identify the type of organization VMH is and its chief characteristics.
What is the probability that the total value of all coins : Suppose we flip two pennies, three nickels, and four dimes. What is the probability that the total value of all coins showing heads is equal to $0.31?
What is the required rate of return on a stock : What is the required rate of return on a stock with a beta of 0.7
How should new technologies be regulated : Is it sometimes necessary to sacrifice a few freedoms to protect national security and to ensure the long- term viability of civil liberty?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare a perpetual inventory record using fifo

Prepare a perpetual inventory record using FIFO.

  Calculate the amount of the adjustment to rowet company ''s

At the end of 2010, Rowet Company reported a deferred tax liability of $6,120 based on an income tax rate of 30%. On June 1, 2011 Congress changed the income tax rate to 35%.

  Determine the hedging strategy

P & G India. Proctor and Gamble's affiliate in India, P & G India, procures much of its toiletries product line from a Japanese company.

  At the beginning of 2009 metatec inc acquired ellsion

at the beginning of 2009 metatec inc. acquired ellsion technology corp for 600 million. in addition to cash receivables

  A12 sells for 50 and has variable costs of 40 model b22

russell corporation sells three different models of mosquito zapper. model a12 sells for 50 and has variable costs of

  Performance of personal and business investments

The performance of personal and business investments is measured as a percentage, return on investment. What type of variable is return on investment?

  Two thirds to bay town and one third to valley city

The trust fund income of $ 1,800 ($ 3,000  $ 700  $ 500) was distributed as provided in the trust agreement: two thirds to Bay Town and one third to Valley City.

  What is leash n collars internal growth rate

Leash N Collar reported a profit margin of 8 percent, total asset turnover ratio of 1.5 times, debt-to-equity ratio of 0.75 times. What is Leash N Collar's internal growth rate?

  Income tax and earnings per share

On February 28, 2009, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2009, was $2,100,000. The income tax rate is 40%.

  Compute the average rate of return for each investment

The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. Compute average rate of return for each investment

  Arrow industries employs a standard cost system in which

arrow industries employs a standard cost system in which direct materials inventory is carried at standard cost. arrow

  What is raid storage technology

What is RAID storage technology?

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