Determine the beta coefficient for stock

Assignment Help Financial Management
Reference no: EM131329405

Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 10.25%; rRF = 6.75%; rM = 8%. Round your answer to two decimal places.

Reference no: EM131329405

Questions Cloud

What is ri the required rate of return on stock i : What is ri, the required rate of return on Stock i? Now assume that rRF remains at 4% but rM increases to 14%. The slope of the SML does not remain constant. How would these changes affect ri?
Calculate the indicated ratio for barry : Data for Barry Computer Co. and its industry average follow. a. calculate the indicated ratio for Barry. b. construcy the DuPont equation for both Varry and the industry. c. outline Barry's strengths and weaknesse and revealed by your analysis. d. su..
What would be the new stock price after recapitalization : The firm is considering sellings bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 30% debt based on market values, its cost of equity will increase to 11% to reflect the increased risk. Bonds can be sol..
Which alternative should be recommended using management : Transco plans on purchasing a bus for $75,000 that will have a capacity of 40 passengers. As an alternative, a larger bus can be purchased for $95,000 that will have a capacity of 50 passengers. which alternative should be recommended using a managem..
Determine the beta coefficient for stock : Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 10.25%; rRF = 6.75%; rM = 8%. Round your answer to two decimal places.
Calculating return-calculate your total return for last year : Calculating returns: Last year you bought a share of 7.25 percent preferred stock for $63.75. Your stock's market price is now $66.92. Calculate your total return for last year.
Determine the beta coefficient for stock : Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 10.25%; rRF = 6.75%; rM = 8%. Round your answer to two decimal places.
Beta and new stock required rate of return : A stock has a required return of 9%; the risk-free rate is 2.5%; and the market risk premium is 3%. What is the stock's beta? New stock's required rate of return will be ......%.
Firm use to discount the project cash flows : Titan Mining Corporation has 8.9 million shares of common stock outstanding and 330,000 5 percent semiannual bonds outstanding, par value $1,000 each. What is the firm's market value capital structure? If the company is evaluating a new investment pr..

Reviews

Write a Review

Financial Management Questions & Answers

  What is effective annual cost of firms current practice

justo Ltd buys on terms 1.5/10, net 30 days. It does not take discounts, but it typically pays 20 days after the invoice date, instead of waiting until Day30. Justso can borrow from the bank at a rate of 18% per annum. If justso is notaking discounts..

  Build the statement using the data and assumptions

Hill Propane Distributors wants to construct a pro forma balance sheet for 2010. Build the statement using the following data and assumptions.

  Adoption of electronic funds transfer affect use of float

How will widespread adoption of electronic funds transfer affect the use of "float"?

  Impact short-run inflation and output byaltering

Given a firms liabilities an increase in interest rates reduces thefirm's net worth because - difficult to keep inflation and output fromfluctuating when aggregate expenditures change because

  Net-zero type of transaction

Some argue that the actions of the Fed since 2008 have been a net-zero type of transaction (i.e. has had no effect on yields). In a few short sentences detail one argument that it is a net-zero type of transaction, and one counter-argument to this.

  What is the amount of the firms net working capital

Scare Train, Inc. has the following balance sheet statement items: current liabilities of $780,940; net fixed and other assets of $1,537,030; total assets of $3,424,010; and long term debt of $676,468. What is the amount of the firms’ net working cap..

  Triangular arbitrage profit by trading at these prices

Assume you are a trader with Deutsche Bank. From the quote screen on your computer terminal, you notice that Dresdner Bank is quoting €0.7627/$1.00 and Credit Suisse is offering SF1.1806/$1.00. You learn that UBS is making a direct market between the..

  Fair return on the well

You own an oil well from which you will receive 10 annual payments of $30,000. The first payment will be made 2 years from now(end of second year). If you think a fair return on the well is 5,5%, how much should you ask if you decide to sell now?

  Estimate the value of the stock

Burklin, Inc., has earnings of $18.6 million and is projected to grow at a constant rate of 4 percent forever because of the benefits gained from the learning curve. Currently, all earnings are paid out as dividends. Estimate the value of the stock

  What is the bank cost of preferred stock

Sixth Fourth Bank has an issue of preferred stock with a $6.70 stated dividend that just sold for $87 per share. What is the bank’s cost of preferred stock? How would you set this up?

  What was total real return on investment

You bought one of Great White Shark Repellant Co.’s 11 percent coupon bonds one year ago for $810. These bonds make annual payments and mature 7 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 13 ..

  Determine its cost of debt-pretax cost of debt

Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has an embedded cost of 10 percent annually. Wh..

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