What would be the return on the stock

Assignment Help Financial Accounting
Reference no: EM132796909

Question - You are holding a stock that and has a beta of 2 and is currently in equilibrium. The required return on the stock is 15%, and the market return is 10 percent. What would be the return on the stock, if the market return increased to 13% while the risk-free rate remained unchanged?

A. 21%

B. 18%

C. 19%

D. 20%

Reference no: EM132796909

Questions Cloud

How will you prepare children and their families : How will you prepare those children, their families, and the staff in your care in each competency? Be sure you provide specific details on each competency.
What amount should be reported as cash received on sale : The equipment had associated accumulated depreciation of $64,000. On a statement of cash flows, what amount should be reported as cash received on sale?
What is the effect of this property dividend : What is the effect of this property dividend on 2016 retained earnings after all nominal accounts are closed
What is the amount of cash received on the sale of equipment : Equipment with an original cost of $80,000 and a book value of $60,000 is sold at a loss of $6,000. What is the amount of cash received on the sale of equipment
What would be the return on the stock : The required return on the stock is 15%, and the market return is 10 percent. What would be the return on the stock
What weights should mv corporation use in its? wacc : Its common equity trades at $55 per? share, and the firm has 6.1 million shares outstanding. What weights should MV Corporation use in its? WACC?
What is pacific company cost of equity : Under the tax rate of 40%, an unlevered firm Pacific Company's WACC is currently 14 percent. The company can borrow at 6 percent.
Analyze the role that science and math have on cognition : Analyze the role that science and math have on cognition in early childhood education and in guiding children on becoming 21st-century learners.
Calculate the actual ingredient costs : Flowers' budget included ingredient costs of $968,421,051. They ended up receiving $2.032 per loaf of bread. Calculate the actual 2018 ingredient costs

Reviews

Write a Review

Financial Accounting Questions & Answers

  How many shares would be assumed to be issued

How many shares would be assumed to be issued for no consideration if the options were exercised? How many new ordinary shares would be issued

  Assume average fixed costs

This problem continues the Davis consulting, Inc. situation from Problem P19-40 of chapter 19. Davis Consulting provides consulting service at an average price of $175 per hour and incurs variable cost of $100 per hour. Assume average fixed costs are..

  Morganton company makes one product

Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations

  Determine the annual cash flow for each year

Determine the weighted average cost of capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

  Generate the revenues determined in requirement

Breed Products has performed extensive studies on its costs and production and estimates the following annual costs based on 150,000 units (produced and sold): Compute Breed's unit selling price that will yield a profit of $600,000, given sales of 15..

  Assuming an appropriate interest rate

Flint Corporation purchased a special tractor on December 31, 2017. The purchase agreement stipulated that Flint should pay $18,650 at the time of purchase and $5,190 at the end of each of the next 8 years. The tractor should be recorded on December ..

  Recording petty cash account transactions

Recording Petty Cash Account Transactions. During March, Anderson Company engaged in the following transactions involving its petty cash fund: On March 1, Anderson Company established the petty cash fund by issuing a check for $1,500 to the fund cust..

  Why the bottom-up approach to budgeting is considered

Explain why the bottom-up approach to budgeting is considered a more successful management technique then a top down approach. Provide an example of implementation of the bottom-up approach to budgeting.

  What amount of goodwill will be reported if the acquisition

On December 31, 20X8, Mercury Corporation acquired 100 percent ownership of Saturn Corporation. On that date, Saturn reported assets and liabilities with book values of $300,000 and $100,000, respectively,  Based on the preceding information, what am..

  Supplier of instrument gauge clusters uses a kanban system

A supplier of instrument gauge clusters uses a kanban system to control material flow. The gauge cluster housings are transported five at a time. A fabrication center produces approximately 10 gauges per hour. It takes approximately two hours for the..

  Compute the break-even sales for the current year

Determine the total varible costs and the total fixed costs for the current year? Determine (a) the unit variable cost and (b) the unit contribution margin for the current year? Compute the break-even sales (units) for the current year?

  Draft the income tax expense section of the income statement

Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2015. (1-6 above) Draft the income tax expense section of the income statement, beginning with Income before income taxes.

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