Which one of the following stocks is correctly priced if the risk-free rate of return is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Which one of the following stocks is correctly priced if the risk-free rate of return is 5% and the market risk premium is 9%? Stock Beta Expected Return 0.94 1.23 1.31 A B C D O a. A O b. B O C.C O d. D 1.42 13.46% 17.8% 15.6% 20.9% Which one of the following stocks is correctly priced if the risk-free rate of return is 5% and the market risk premium is 9%? Stock Beta Expected Return 0.94 1.23 1.31 A B C D O a. A O b. B O C.C O d. D 1.42 13.46% 17.8% 15.6% 20.9%
Expert Answer:
Answer rating: 100% (QA)
The correctly priced stock is Stock A We can use the Capital Asset Pricing Model CAPM to calculate t... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
You are asked to develop a Floppy Disk program that allows users to access a floppy disk locally mounted on a computer. You are expected to use C programming language. In your program, all file I/O...
-
You are part of a team that discovered a new planet in our solar system and decided to call it Planet Assoca. This new planet has no atmosphere, a solar constant (S) of 1200 W/m 2 , an albedo () of...
-
The coefficient of the stock of a company is 1.32. Its average market value net debt ratic is 50%. What is its unlevered coefficient? Paper Industry Capital Structure and Coefficients as of...
-
1:When developing a marketing strategy for business customers, it is essential to understand the process the business goes through when making a buying decision. Knowledge of business buying behavior...
-
An AC power supply produces a maximum voltage Vmax = 100 V. This power supply is connected to a 24.0-Ω resistor, and the current and resistor voltage are measured with an ideal AC ammeter and...
-
What effect would increasing the voltage have on the metal-removal rate in electrodischarge machining? Why?
-
Find five interesting facts in Tables 1.4 and 1.5. DATA FROM TABLE 1.5 TABLE 1.4 Broad Categories of Exports of Selected Countries, 2010 SITC Code Product United United States Germany Japan China...
-
For its top managers, Worldwide Travel formats its income statement as follows: WORLDWIDE TRAVEL Contribution Margin Income Statement Three Months Ended March 31, 2014 Sales Revenue ............. $...
-
You recently overheard that your company's competitors have started to purchase their materials from an online marketplace. You identify your company's top three products and collect information...
-
Letang Company has three divisions (R, S, and T), organized as decentralized profit centers. Division R produces the basic chemical Ranbax (in multiples of 1,000 pounds) and transfers it to Divisions...
-
For Angie, a ten percent rise in the price of flowers results in her quantity demanded of flowers to fall by less than ten percent, then we can say for flowers her demand is: Select one: a. elastic....
-
How to give a summary of your existing business . We are a transport company in FRANCE and are wanting to connect to one of the biggest players in logistics industry , how do i write a summary . For...
-
investment banking to your local college. Definitions and purpose. Roles they play for corporations. The risks they take and why they make so much money? How an LBO or private equity ownership change...
-
How do power and politics manifest in cross-functional collaborations and interdepartmental relationships, and how can organizations foster collaboration while mitigating power struggles ?
-
Based on the needs of your Banking Institution, the CIO and you agree on the following course of action: Apply Deep Learning and deployment of the correct Algorithms needed Apply Intelligent Process...
-
1. Explain Intentional Scaremongoring" attempts/activities observed in the Corona Pandemic risk communications. 2. How can discrete event simulation be deployed to explain and understand Coronavirus...
-
In your project 64-week project, the earned value analysis shows the following: The project was scheduled to be 30 percent complete at this time. You have completed 19 of the 20 deliverables (all of...
-
If you want to solve a minimization problem by applying the geometric method to the dual problem, how many variables and problem constraints must be in the original problem?
-
a. Wilson filed his individual tax return on the original due date, but failed to pay $700 in taxes that were due with the return. If Wilson pays the taxes exactly 2 months late, calculate the amount...
-
Jason and Mary are married taxpayers in 2012. They are both under age 65 and in good health. For this tax year, they have a total of $41,000 in wages and $500 in interest income. Jason and Mary's...
-
Ken paid the following amounts for interest during 2012: Qualified interest on home mortgage...........................................$4,700 Auto loan...
-
An instrument has a failure rate of 0.015 failures per year. What is the unreliability for a 5-year mission?
-
An instrument has a failure rate of 0.015 failures per year. Failures are detected once per year when a periodic inspection is performed. Assuming perfect restoration, what is the PF avg ?
-
Each of the 50 transmitters in identical service had a test time of 7,640 hours. During this period, three failures occurred. Calculate the failure rate.
Study smarter with the SolutionInn App