1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Delvig [45]
3 years ago
8

A stock has an expected return of 15.1 percent, the risk-free rate is 5.95 percent, and the market risk premium is 7.8 percent.

Required: What must the beta of this stock be
Business
1 answer:
horsena [70]3 years ago
6 0

Answer:

1.17%

Explanation:

Expected return is 15.1 %

Risk free rate is 5.95 %

Market risk premium is 7.8%

Therefore the beta can be calculated as follows

Expected return= risk free rate + (beta×market risk premium)

15.1%= 5.95% + (beta × 7.8%)

15.1%-5.95%= 7.8% beta

9.15%= 7.8% beta

beta= 9.15%/7.8%

beta= 1.17%

You might be interested in
Maynard Inc. preferred stock pays an annual dividend of $7 per share. Which of the following statements is true for an investor
Feliz [49]

Answer:

A. The value of the preferred stock is $77.78 per share

7 0
3 years ago
why did aig get bailed out while lehman brothers did not? group of answer choices it had a stronger balance sheet lehman brother
GarryVolchara [31]

Because all other big financial corporations would have failed due to the prospect of systemic risk, aig received bailout money while Lehman Brothers did not.

The process of raising money or capital for any form of spending is referred to as finance. It involves directing different sources of funding, such as credit, loans, and investment money, to the businesses that can use them most effectively. The definition of finances according to Finance Box is "The money that people, businesses, or national economies earn and spend." Risk is the potential for bad things to happen, to put it simply. Risk refers to uncertainty on how a certain action will affect or have implications for a human value (such as one's health, well-being, wealth, property, or the environment), frequently focused on unfavourable outcomes.

Learn more about Risk  here

brainly.com/question/17284407

#SPJ4

3 0
1 year ago
If you have 1-year rate is 8%, 2-year rate is 9%, and 3-year rate is 10%. Assume that the pure expectations theory for the term
e-lub [12.9K]

Answer:

1 year rate 2 year from now = 12%  (Approx)

Explanation:

Given:

1-year rate = 8%

2-year rate = 9%

3-year rate = 10%

Computation:

According to Pure Expectations Hypothesis,

(1 + 3-year rate)³ = (1 + 2-year rate)² (1 + 1 year rate 2 year from now)

(1.10)³ = (1 + 1.09)²(1 + 1 year rate 2 year from now)

1.331 = 1.1881 (1 + 1 year rate 2 year from now)

(1 + 1 year rate 2 year from now)  = 1.12

1 year rate 2 year from now = 0.12

1 year rate 2 year from now = 12%  (Approx)

3 0
3 years ago
The two most common compensation methods for teams are:
marishachu [46]
They are skill based pay and gain sharing.
6 0
3 years ago
In 2016, teller company sold 3,000 units at $600 each. variable expenses were $420 per unit, and fixed expenses were $270,000. t
Anit [1.1K]
Assuming that you have the values for the year 2017, the break-even point would be 1500 units for the year 2017. To calculate this, we use the idea that at the breaking point, total sales is equal to the total cost or expenses made. Which would be:

selling (x) = fixed + variable (x)

x = fixed / (selling - variable)
x = 270000 / (600-420)
x = 1500 units
6 0
3 years ago
Other questions:
  • The span of control for a manager:
    10·1 answer
  • 4. If a good is considered "normal" by economists, an increase in consumers' incomes will result in a decrease in the
    6·1 answer
  • Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting r
    7·1 answer
  • At the pregame conference, the plate umpire asks both head coaches if they have listed all their substitutes on the lineup card.
    10·1 answer
  • Inflation is a sustained rise in the general level of prices of goods and services.
    9·2 answers
  • Matt broderick company began operations on january 2, 2013. it employs 9 individuals who work 8-hour days and are paid hourly
    14·1 answer
  • Management at the Forrest Company currently sells its products for $ 225 per unit and is contemplating a 40​% increase in the se
    12·1 answer
  • Country A and Country B both recorded an increase in real GDP of 5 percent per year from 1980 to 2012. During this time, the pop
    6·1 answer
  • With help from the marketing department, engineers at Easy Electronics have designed a new type of cable modem that is easier to
    11·1 answer
  • : Identify your top four work values. Work values are the elements of
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!