Question: thank you! Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 3%, and you believe the

Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 3%, and you believe the following probability distribution for future market retums is realistict a. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.) 1. n=1.6%+(9.9%)bi If. n=3,0%+(11,3%)b, IIf. h=5.3%+(10.9%)b1 IV. h=3.0%+(9.996)b) V. n=1.6%+(=1,3%)bi b. Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places. No c. Suppose Rick Kish, the president, recelves a proposal from a company secking new capital. The amount needed to take a position in the stock. is 550 million, it has an expected return of 16%, and its estimated beta is 1,5 . Should Kish invest in the new company? The new stock be purchased. At what expected rote of return should Kish be indifferent to purchasing the stock? Round your answer to pwo decimal inianen distribution for future market returns is realistic! a. What is the equation for the Security Market Une (SML)? (Hint: First determine the expected market return.) 1. n=1.6%+(9.9%bbb II. n=3.0%+(11.3%)b III. n=5.3%+(10.9%)bi IV. n=3.0%+(9.9%)bi v. n=1.6%+(11.3%)bi b. Calculate Kish's required rate of retum. Do not round intermediate calculations, Round your answer to two decimal places. c. Suppose Rick Kish, the president, recelves a proposal from a company seeking new capital, The amount needed to take a position in the stock. is $50 million, it has an expected return of 16%, and its estimated beta is 1.5. Should Kish invest in the new company? The new stock be purchased. At what expected rate of return should Kish be indifferent to purchasing the stock? Round your answer to two decimal places
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