User Account

All Pages

What is the stock beta

Assignment Help Finance Basics
Reference no: EM133074579

eBook

A stock has a required return of 13%, the risk-free rate is 6.5%, and the market risk premium is 4%.

  1. What is the stock's beta? Round your answer to two decimal places.
  2. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.

Reference no: EM133074579

Questions Cloud

What amount of gain or loss does cg corp recognize : What amount of gain or loss does CG Corp. recognize as a result of the distribution of the land to Goyle in the complete liquidation
Estimate a projected four-year balance sheet : Estimate a projected four-year Balance Sheet.
What is the most mean-variance efficient portfolio : What is the most mean-variance efficient portfolio? Is the one with reward to variability ratio most closely to 1? or the maximum one?
What would be the effect on operating profit : Acceptance of the special order will not affect ABC's normal sales and no selling expenses would be incurred. What would be the effect on operating profit
What is the stock beta : A stock has a required return of 13%, the risk-free rate is 6.5%, and the market risk premium is 4%.
Find value of bond if market interest rate increases : You are considering bonds of two companies. Taxco's bond pay interest at 12 percent p.a. and Maxco's at 6 percent pa Both have face value of Rs 1000 and maturit
Change leadership and goals that impact : Clearly identify purpose and goals for data collection and progress monitoring of IEP goals and objectives. Explain how you will facilitate the change process.
Evaluate the present value of the project : Sunrise Energy Pvt. Ltd. Is considering entering into a project finance contract to build port facilities on the shore of Gujarat for importing Liquified Natura
What would be the increase in profit before income taxes : What would be the increase (decrease) in profit before income taxes by acquiring the new machine as opposed to retaining the present one

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe a situation where empowerment has been used

Describe a situation where empowerment has been used. What are the benefits and drawbacks to empowerment in the situation?

  How many shares need to be sold

The offer price is $69 per share and the company's underwriters charge a spread of 9.5 percent. How many shares need to be sold?

  What is the payback period for each project

What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

  Find the equivalent annual end-of-year dividend

Now suppose the company in (a) actually pays its annual dividend in equal quarterly installments; thus, the company has just paid a dividend of $.80 per share.

  Company a prints scratch-off lottery tickets

Company A prints scratch-off lottery tickets. Because they are instant winner tickets, the printing company knows which tickets are winners.

  Multiple-vote shares present corporate governance issues

To what extent do multiple-vote shares present corporate governance issues? Consider the extent to which control versus ownership can lead to expropriation and

  What skills were required to perform best

What skills were required to perform your best? To what extent were agility, problem solving, and technology skills necessary for success

  Describe its diversity in terms of sex

Examine your own network then describe its diversity in terms of sex, race, ethnicity, and age

  Where is system engineering accomplished

Refer to Figure 7.1. Where is system engineering accomplished? Who is responsible for the accomplishment of system engineering functions? Identify some of the major concerns associated with the organizational relationships shown in the figure.

  What is the project equivalent annual cost

The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required return is 11 percent, what is the project's

  Company cost of capital

1. Tall Trees, Inc. is using the net present value (NPV) when evaluating projects. You have to find the NPV for the company's project, assuming the company's cost of capital is 9.83 percent. The initial outlay for the project is $331,077. The proj..

  How is the given influence different than in the us

Discuss how cultural factors and economic reforms have influenced the accounting practices in the country. How is this influence different than in the U.S.?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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