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asambeis [7]
3 years ago
7

A stock has an expected return of 16.1 percent, the risk-free rate is 6.45 percent, and the market risk premium is 7.2 percent.

What must the beta of this stock be
Business
1 answer:
DiKsa [7]3 years ago
4 0

Answer:

the beta of the stock is 1.34

Explanation:

The calculation of the beta of the stock should be

As we know that

Expected rate of return = Risk free rate + beta × market risk premium

16.1 = 6.45% + beta × 7.2%

16.1% - 6.45% = beta × 7.2%

9.65% = beta × 7.2%

So, the beta should be

= 9.65% ÷ 7.2%

= 1.34

Hence, the beta of the stock is 1.34

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8 0
3 years ago
Franklin Company borrowed $144,000 from a bank on March 1, 2021 and agreed to pay it back in eleven months at an interest rate o
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Answer:

$25,080

Explanation:

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