Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a stock has a required return of 13%, the risk-fre

A stock has a required return of 13%, the risk-free rate is 6.5%, and the...

50.1K

Verified Solution

Question

Finance

image
A stock has a required return of 13%, the risk-free rate is 6.5%, and the market risk premium is 3% B. What is the stock's beta? Round your answer to two decimal places. b. If the market risk premium increased to 5%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not found intermediate calculations. Round your answer to two decimal places 1. At 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. 11. 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 TIL. S the stocks 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 TV. W the stocks beta is less than 1.0, then the change in required rate of return will be greater than the change in the market ik premium V. the stock's betin is greater than 1.0, then the change in required rate of return will be less than the change in the market risk premium 2. Stocks required rate of return will be 14 15

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

Algebra
1.2K views

Relationship A has a greater rate than Relationship B This table represents Relationship B Hours...

Algebra
1.2K views

The function h x defined as f x 1 x 1 can be expressed in...

Accounting
1.2K views

What is adjusted trial balance(?) Which account balance will nowise change among the unadjusted trial...

Accounting
1.2K views

Excel Online Structured Activity: Statement of cash flows You have just been hired as...

Accounting
1.2K views

Read the requirements. Requirement 1. Complete the worksheet. Use letters a through e to...

Accounting
1.2K views

(31 MARKS QUESTION 5 Mascot Ltd. has provided you with the following budgeted and actual...

Accounting
1.2K views

Sweet Co. sells $491,000 of 8% bonds on March 1,2025. The bonds pay interest on...

Accounting
1.2K views

Auerbach Inc. issued 4% bonds on October 1, 2021. The bonds have a maturity date...

Accounting
1.2K views

Pick any multinational company and describe the strategy the company used to enter a specific...

Accounting
1.2K views

Problem 2-18 (Algo) Plantwide Predetermined Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3] Landen Corporation uses job-order...

Finance
1.2K views

Your R&D division has just synthesized a material that will superconduct electricity at room temperature;...

Finance
1.2K views

The point E on the international Fisher Effect graph below suggests there would be no...