The market price of a security is $40. Its expected rate of return is 13%. The risk-free rate is 7%, and the market risk premium is 8%. What will the market price of the security be if its beta doubles (and all other variables remain unchanged) ? Assume the stock is expected to pay a constant dividend in perpetuity. (Round your answer to 2 decimal places.)
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The market price of a security is $40. Its expected rate of return is 13%. The risk-free rate is 7%, and the market risk premium is 8%. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Heartbeat Industries has recently introduced a new production method that will make the production of their medical devices more cost-effective. Which of the following will most likely be the result of this innovation? A.
Answers (1)
Match the value chain activity in the left column with the scenario in the right column: 1. customer call center 2. supply schedules 3. order taking 4. accounting department 5. staff training 6. research and development 7.
Answers (1)
On the day his son was born, a father decided to establish a fund for his son's college education. The father wants the son to be able to withdraw $4000 from the fund on his 18th birthday, again on his 19th birthday, again on his 20th birthday, and
Answers (1)
What are "guns or butter" decisions?
Answers (1)
An example of a firm applying the overall cost leadership generic strategy in a value-chain activity would be to automate the production assembly line to reduce scrappage from quality errors. 1. True2. False
Answers (1)
New Questions in Business
Which of the following is a disadvantage of the sole proprietorship form of ownership
Answers (2)
Products that are essential for life, such as water or groceries, yield more marginal utility than rare products, such as diamonds or luxury vehicles. A. True B. False.
Answers (1)
Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Materials are assigned to each job according to actual cost.
Answers (1)
Which of the following is true of internal recruiting? a. It increases recruitment time and costs. b. It targets job applicants that do not currently work for the organization. c. It improves employee commitment and morale. d.
Answers (2)
In a perpetual average cost system: a. The average is determined by dividing the total number of units sold by the cost of units purchased during the period. b. A new weighted-average unit cost is calculated each time additional units are purchased.
Answers (1)