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1. A stock has an expected return of 12.4 percent, its beta is 1.17, and the risk-free rate is 4.2 percent. What must the expected return on the market be? (Round your answer to 2 decimal places. (e.g., 32.16))
Market expected return %
2. Stock Y has a beta of 1.3 and an expected return of 15.3 percent. Stock Z has a beta of 0.70 and an expected return of 9.3 percent. If the risk-free rate is 5.5 percent and the market risk premium is 6.8 percent, the reward-to-risk ratios for stocks Y and Z are and percent, respectively. Since the SML reward-to-risk is percent, stock Y is (Click to select) over valued undervalued and Stock Z is (Click to select)over valued under valued. (Round your answers to 2 decimal places. (e.g., 32.16))
there can be a good strategy with a bad product and a good product with a bad strategy and this can impact product or
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Wice Shy Industries has a debt−equity ratio of 1.6. Its WACC is 8.6 percent, and its cost of debt is 6.1 percent. The corporate tax rate is 35 percent. What is the company’s cost of equity capital? What is the company’s unlevered cost of equity capit..
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