If a project needs one earth mover six months from now in order to complete one activity, and the organization has four such mac
1 answer:
You might be interested in
Answer:
average beta of the new stocks to achieve the target required rate of return is 2.29
Explanation:
given data
Portfolio amount invested = $40,000,000
Beta = 1
Risk free rate = 4.25%
Market risk premium = 6%
Hazel expects = $60 million
expected return new investments = 13.00%
to find out
average beta of new stocks be to achieve the target required rate of return
solution
we will use here CAPM formula that is
Expected return = Risk free rate + Beta × Market risk premium .........1
put here value we get
13% = 4.25% + Beta × 6%
0.06 × Beta = 13% - 4.25%
Beta = 1.458
now we get Weighted beta that is express as
Weighted beta = weight of old stock in new portfolio × 1 + Weight of new stock in new portfolio × beta of new stock ..................2
put here value we get
1.458 =
solve it we get
beta = 2.29
so that average beta of the new stocks to achieve the target required rate of return is 2.29
Answer:
247,500
Explanation:
The calculation showing the weighted average number of shares to be used in the calculation of the of the basic earning per share for 2018 is shown below:
=