Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a stock has a required return of 7%, the risk-free

A stock has a required return of 7%, the risk-free rate is 3.5%, and the...

50.1K

Verified Solution

Question

Accounting

A stock has a required return of 7%, the risk-free rate is 3.5%, and the market risk premium is 3%.
a. What is the stock's beta? Round your answer to two decimal places.
calculations. Round your answer to two decimal places.
I. If the stock's beta is equal to 1.0, then the change in required rate of return will be less than the change in the market risk premium.
II. If the stock's beta is greater than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
III. If the stock's beta is less than 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
IV. If the stock's beta is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium.
V. If the stock's beta is equal to 1.0, then the change in required rate of return will be greater than the change in the market risk premium.
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Neuroendocrine mechanisms control homeostasis. Describe a homeostatic regulation that involves both neural and hormonal regulations. (7 pts) Provide...

Medical Sciences
Q

The following is a gene sequences in human that related to ovarian cancer. Design a pair...

Biology
Q

An airplane propels itself eastward with speed v. A crosswind with speed u is directed at...

Physics
Q

Discuss how ecological effect can be used to determine if or which fuel cell can be...

Electrical Engineering
Q

entify the area of a regular pentagon with side length 11 cm Round to the...

Geometry
Q

uppose that an employee at a local company checks his watch and realizes that he...

Statistics
Q

Sunshine Services is a nonprofit organization devoted...

Accounting
Q

Q4. Explain briefly the important uses of cash flow budget in farming. ...

Accounting
Q

Selected data from Emporia Company follow: Balance Sheets As of December 31 2017 $480,000 (20,000...

Accounting
Q

Material and Labor Variances The following actual and standard cost data for direct material and...

Accounting
Q

develop a yearly budget for a healthcare organization. You will be given the required elements...

Accounting
Q

When fire struck and destroyed a substantial portion of the contents of Mark's home, the...

Finance