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
Alenkinab [10]
2 years ago
12

If the expected rate of return on the market portfolio is 12% and T-bills yield 6%, what must be the beta of a stock that invest

ors expect to return 10%?
Business
1 answer:
DENIUS [597]2 years ago
8 0

Answer:

the beta of the stock is 0.67

Explanation:

The computation of the beta of the stock is shown below

As we know that

As per CAPM model

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

0.10 = 0.06 + beta × (0.12 - 0.06)

Beta = 0.04 ÷ 0.06

= 0.67

Hence, the beta of the stock is 0.67

We simply applied the above formula so that the correct value could come

And, the same is to be considered

You might be interested in
When prices drop below the point where supply and demand meet, it results in... A. coordination. B. disequilibrium. C. equilibri
xxMikexx [17]
Disequilibrium as demands are not met
5 0
3 years ago
Read 2 more answers
Carby Hardware has an outstanding issue of perpetual preferred stock with an annual dividend of $5.10 per share. If the required
DerKrebs [107]

Answer:

PV = $78.46153 rounded off to $78.46

Explanation:

A perpetuity is an unlimited series of cash flows that are of constant amount and occur after equal intervals of time. As they are unlimited in number, we say that they are perpetual. A perpetual preferred stock can also be said to be in form of a perpetuity as it pays a constant dividend after equal intervals of time. To calculate the price of the preferred stock, we use the present value of perpetuity formula which is,

PV = Cash flow / r

Where,

  • r is the required rate of return

PV = 5.1 / 0.065

PV = $78.46153 rounded off to $78.46

4 0
2 years ago
Wally and Sally want to go into business together and plan on offering a tutoring service to high school and college students. W
sashaice [31]

Answer:

A. Yes, because the corporation would be required to pay tax on its profits, and the shareholders would also be required to pay taxes on dividends

4 0
3 years ago
Immmm boooredddd<br><br><br> talkkk anyoneeee
Bumek [7]

Answer:

can you tell me how to get bumps in my lower eye

7 0
2 years ago
Read 2 more answers
Prior to being banned in 2002 by the McCain-Feingold Act, unlimited monetary contributions that were earmarked for party-buildin
nordsb [41]

Answer:

B.

Explanation:

Soft money can be defined as a money raised by party or committees that's not been regulated by the federal campaign finance. Such campaign contributions are not made within the federal law and thus are illegal to raise. These monetary contributions are used for party building activities such as electoral registration programmes. The origin of soft money dates back to the Watergate reforms.

<u>In the given case, the monetary contributions were used for party-building expenses or generic party advertising. Thus this monetary contribution is known as soft money.</u>

So, the correct answer is option B.

7 0
3 years ago
Other questions:
  • I just received a new job. i have the responsibility of leading physicians in the adoption of clinical information systems. my t
    14·1 answer
  • !! 30 Points !! You see a commercial for a new product. It promises you clear skin in 30 days and greater confidence. The compan
    6·2 answers
  • Hector is philosophically opposed to unions. "Why should I be required to join an organization I don't agree with, or pay a fee
    12·1 answer
  • It is the ______ of accounting professionals to use professional and moral judgment while dealing with clients or organizations.
    5·1 answer
  • Toby works in an office where employees scan a large number of documents everyday. His manager has asked him to purchase a new s
    6·2 answers
  • A manufacturing department completed and transferred to finished goods a total of 50,000 units. They also had 2,500 units in end
    5·1 answer
  • How do my educational choices connect with my long-term goals and vision for life?
    5·1 answer
  • Alt Corporation enters into an agreement with Yates Rentals Co. on January 1, 2021 for the purpose of leasing a machine to be us
    13·1 answer
  • On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use. The building was c
    10·1 answer
  • Some __________ ask members/customers to work at the organization for a number of hours a month as part of their duties.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!