Automaton, Inc.'s current stock price is $57. Analysts forecast its price will be $45 in one year.

Fantastic news! We've Found the answer you've been seeking!

Question:

Automaton, Inc.'s current stock price is $57. Analysts forecast its price will be $45 in one year. Automaton's Beta is 1.2. The Risk-Free Rate is 3% and Return of the Market Portfolio is 7%. What is the minimum acceptable Expected Return of this Portfolio (CAPM)?

a) 7.0%

b) 10.0%

c) 7.8%

d) 11.4%

Posted Date: May 18, 2024 10:10 AM

See More Questions

Melissa is a sole trader. Her capital gains and capital losses for 2020-21 are 27,000 and 700 respectively. She has capital losses brought forward from 2019-20 of 12,900 and she also has unrelieved...
The telecommunications industry suffered a severe business downturn during the early part of this decade. Lucent Technologies Inc. is one of the major equipment providers to this industry. Below are...
Rim Corporation makes tire rims and sells them to Superior Vehicles, Inc., who installs them on cars. One set of rims is defective, which an inspection would reveal. Superior does not inspect the...
Presentation Baker Corporation was organized on July 1, with an authorization of 50,000 shares of $\$ 5$ no-par value preferred stock ( $\$ 5$ is transactions affecting stockholders' equity...
A partner in the national accounting firm mentioned in the previous questions does not believe that the time estimates for each activity can be specified with certainty. Instead, she prefers to...
Problem 3-11 (Algo) Perot Corporation is developing a new CPU chip based on a new type of technology. Its new chip, the Patay2 chip, will take two years to develop. However, because other chip...
A message M is divided into the following 5 message blocks, M1, ..., M5, each of whose size is 8 bits, i.e., the block size is 8 bits: M1 = 11010101 M2 = 00111011 M3 = 00010001 M4 = 10001001 M5...
Sam wants to sell his stereo system because one side of his amplifier occasionally doesn't work properly and the cost of repair is so high that Sam wants to get a new stereo. Otherwise, it works well...
What is your default in conflict styles? Provide a short example if you can.
A startup technology company has just finished developing its branding and marketing materials, including the design of its e-newsletter. After conducting a pilot and making adjustments with a few...
If the numbers -2.5, -1.6, -31, 10, and -0.5 were graphed on a number line, which would appear farthest to the left?
What is the standard structure of a business memo, and how should each section be formatted to enhance readability and clarity? Discuss the role of headings, bullet points, and white space in memo...
Bella Pool Company sells prefabricated pools that cost $80,000 to customers for $128,000. The sales price includes an installation fee, which is valued at $18,000. The fair value of the pool is...
With your classmates, form small teams of skunkworks. Your task is to identify an innovation that you think would benefit your school, college, or university, and to outline an action plan for...
Briefly explain the operation of a periodic inventory system. Include an explanation of how the cost of goods sold is determined.
Estimate the ending inventory by the gross profit method, given the following data: beginning inventory, $\$ 40,000$; net purchases, $\$ 100,000$; net sales, $\$ 112,000$; average gross profit...
Use your operating systems built-in capability to encrypt a file. Store the enciy'pted file in a folder that can be shared with other users on that computer. Then create a new user account. Assign it...

Automaton, Inc.'s current stock price is $57. Analysts forecast its price will be $45 in one year.

Question:

Expert Answer:

Students also viewed these finance questions