What is the implied beta coefficient of the stock

Assignment Help Financial Management
Reference no: EM13730373

Assume that the risk-free rate is 8 percent, the required rate of return on the market (or an average-risk stock) is 13 percent, and the required rate of return on Acme Healthcare stock is 15 percent. What is the implied beta coefficient of the stock?

a. 1.5

b. 1.4

c. 1.2

d. 1.0

e. 0.8

Reference no: EM13730373

Questions Cloud

Semi-annually and the market yield : Find the price of the following Bond X The interest rate on the bond is 8%, paid semi-annually and the market yield is 9%. The maturity is 10 years
Yield to maturity and required returns : The Brownstone Corporation's bonds have 4 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. What is the yield to maturity at a current market price of $827?
What is the stocks expected rate of return : Managed Healthcare's current stock price is $25, its next per share dividend (assumed to be paid annually) is forecasted to be $1.00, and analysts expect the company to grow at a constant annual rate of 10 percent. What is the stock's expected rate o..
What is the value of gold coasts stock : Gold Coast Health System just paid an annual dividend of $1.50, which is expected to grow at a constant rate of 5 percent per year. If the current required rate of return is 15 percent, what is the value of Gold Coast's stock?
What is the implied beta coefficient of the stock : Assume that the risk-free rate is 8 percent, the required rate of return on the market (or an average-risk stock) is 13 percent, and the required rate of return on Acme Healthcare stock is 15 percent. What is the implied beta coefficient of the stock..
What is the stocks value if investors require rate of return : Assume that US Med ware is a constant growth company whose last dividend per share (D0) was $1.00. The dividend is expected to grow at a constant rate of 8 percent per year. What is the stock's value if investors require a 15 percent rate of return?
Valuing preferred stock : E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8 percent on this stock, how much should..
Interest rate risk : Both Bond Bill and Bond Ted have 7 percent coupons, make semi-annual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percen..
Non constant Growth Stock Valuation : Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $0.60 coming 4 years from today.

Reviews

Write a Review

Financial Management Questions & Answers

  What about translation exposure

How should you manage operating exposure? What about translation exposure? Explain your reasons behind the answers to both.

  Long-term investment projects

you realize your company would make a significant profit from doing business in China. You also discover that policies on employee welfare, labor relations, etc. are the antithesis of what your CEO firmly believes.

  You recently graduated from college and your job search led

you recently graduated from college and your job search led you to east coast yachts. since you felt the companys

  Functioning of the financial reporting system

Objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions

  A zero bond with a long maturity date

A zero bond with a long maturity date has:

  Source of systematic risk

Which of the following is not a source of systematic risk?

  Draw up balance sheet and income statement

Draw up balance sheet and income statement.

  What is the break-even cost per kilowatt-hour

Compact fluorescent lamps (CFLs) have become more popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $0.47 and lasts for 1,000 hours. A 15-watt CFL, which provides the same light, costs ..

  What should be the market value of its stock today

Forral Company has never paid a dividend. But, the company plans to start paying dividends in two years – that is, at the end of Year 2. The first dividend is expected to be $2 per share. The second dividend, and every dividend thereafter is expected..

  How are financial trades made in an over-the-counter market

How are financial trades made in an over-the-counter market? Discuss the role of a dealer in the OTC market.

  Investment has successfully increased shareholder wealth

What indications of financial performance must a company consider in evaluating whether an investment has successfully increased shareholder wealth?

  In order to develop effective strategies it is critical to

external environmental scannbspin order to develop effective strategies it is critical to understand the marketplace

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd