Homework Answers
Beta is a measure of systematic or market risk that impacts a particular security. This is a non-diversifiable risk, that is a risk that cannot be removed and the market would compensate the holder of the security for this risk.
Hence, answer is market
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Question 7 5 pts The beta coefficient is a measure of a stock's risk. default market...
check into a hotel Paraphrasing Tool ... Hotel Review - Ame... University of South... in Marketing...
check into a hotel Paraphrasing Tool ... Hotel Review - Ame... University of South... in Marketing - Chapte... Customer Service V... HFT 360s_ prmy car Question 8 5 pts Swanson Company's long-run constant dividend growth is expected to be 10%. If the required return (rs) for Swanson is 15%, and the most recent dividend paid (Do) was $3.00, what is the most likely stock price one year from now? $88.50 $95.20 $110.75 $55.30 $72.60 D Question 9 According to the...
Swanson Company’s long-run constant dividend growth is expected to be 12%. If the required return (rs)...
Swanson Company’s long-run constant dividend growth is expected to be 12%. If the required return (rs) for Swanson is 15%, and the most recent dividend paid (D0) was $3.00, what is the most likely stock price one year from now? - $132.90 -$144.50 -$124.00 -$125.44 -$122.30
13. Beta is a measure of a stock's: Systematic Risk Risk relative to the market Both...
13. Beta is a measure of a stock's: Systematic Risk Risk relative to the market Both A and B None of the above The most volatile stock would have Beta. Higher than 1.0. Lower than 1.0. Very close to 0.0. Beta is not related to volatility. Discounted cash flow techniques used in valuing common stock are based on: future value analysis. present value analysis. The CAPM. the APT. c.
please help. 5. Why is it argued that beta is the best measure of a stock's...
please help.
5. Why is it argued that beta is the best measure of a stock's risk? How can a firm influence the size of its beta? 4 points 6. What happens to the SML graph if inflation changes or if risk aversion changes? How will this impact the required returns of stocks with a beta of 0.5, 1.0, or 1.5, respectively? (You do not need to provide calculations on this, but explain what happens.) 5 points F4 F5 F6...
Required return on Stock = Risk-free return + (Market risk premium)(Stock's beta) to compensate the investor...
Required return on Stock = Risk-free return + (Market risk premium)(Stock's beta) to compensate the investor for risk. If a stock's expected return plots below the SM If a stock's expected return plots on or above the SML, then the stock's return is -Select- the stock's return is -Select- to compensate the investor for risk. The SML line can change due to expected inflation and risk aversion. If inflation changes, then the SML plotted on a graph will shift up...
10% Question 6 5 pts What is the return of a stock that trades at $35,...
10% Question 6 5 pts What is the return of a stock that trades at $35, will pay a $0.75 dividend at the end of the year, and grows at a rate of 8%? 9.62% 12.01% 10.14% 10.69% 11.23% Question 7 The beta coefficient is a measure of a stock's 5 pts
Consider a company with a beta of 1.6. The risk-free interest rate in the market is...
Consider a company with a beta of 1.6. The risk-free interest rate in the market is 4%, whereas the market risk premium is 6%. The recent dividend was just declared for the company and was $3.00 per share. The required rate of return for the stock is 12%, and the growth rate of dividends is constant at 5%. A.) Using a dividend discount valuation approach, what is the intrinsic value of the stock? B.) If you held the stock for...
Stock in Nantec Corporation has a beta of 1.4. The market risk premium is 8%, and...
Stock in Nantec Corporation has a beta of 1.4. The market risk premium is 8%, and T-bills are currently yielding 5.5%. The company's most recent dividend was $2 per share, and dividends are expected to grow at a 5% annual rate indefinitely. If the stock sells for $42 per share, what is your best estimate of the company's cost of equity? 14.46% 13.35% 15.57%
Check into a Noel... 5 pts Question 4 Which if the following is most correct? The...
Check into a Noel... 5 pts Question 4 Which if the following is most correct? The slope of the SML is a function of investors' risk aversion. All of the answers are correct. The intercept of the SML is the risk-free rate. The SML plot shows the required rate of return of assets having different betas. On the SML plot, beta is on the horizontal axis. Question 5 If D = $2.00, g = 6%, and Po = $8, what...
6. Within-firm risk and beta risk Understanding risks that affect projects and the impact of risk...
6. Within-firm risk and beta risk Understanding risks that affect projects and the impact of risk consideration Yatta Net International has manufacturing, distribution, retail, and consulting divisions. Projects undertaken by the manufacturing and distribution divisions tend to be low-risk projects, because these divisions are well established and have predictable demand. The company started its retail and consulting divisions within the last year, and it is unknown if these divisions will be profitable. The company knew that opening these new divisions...
check into a hotel Paraphrasing Tool ... Hotel Review - Ame... University of South... in Marketing - Chapte... Customer Service V... HFT 360s_ prmy car Question 8 5 pts Swanson Company's long-run constant dividend growth is expected to be 10%. If the required return (rs) for Swanson is 15%, and the most recent dividend paid (Do) was $3.00, what is the most likely stock price one year from now? $88.50 $95.20 $110.75 $55.30 $72.60 D Question 9 According to the...
13. Beta is a measure of a stock's: Systematic Risk Risk relative to the market Both A and B None of the above The most volatile stock would have Beta. Higher than 1.0. Lower than 1.0. Very close to 0.0. Beta is not related to volatility. Discounted cash flow techniques used in valuing common stock are based on: future value analysis. present value analysis. The CAPM. the APT. c.
please help.
5. Why is it argued that beta is the best measure of a stock's risk? How can a firm influence the size of its beta? 4 points 6. What happens to the SML graph if inflation changes or if risk aversion changes? How will this impact the required returns of stocks with a beta of 0.5, 1.0, or 1.5, respectively? (You do not need to provide calculations on this, but explain what happens.) 5 points F4 F5 F6...
Required return on Stock = Risk-free return + (Market risk premium)(Stock's beta) to compensate the investor for risk. If a stock's expected return plots below the SM If a stock's expected return plots on or above the SML, then the stock's return is -Select- the stock's return is -Select- to compensate the investor for risk. The SML line can change due to expected inflation and risk aversion. If inflation changes, then the SML plotted on a graph will shift up...
10% Question 6 5 pts What is the return of a stock that trades at $35, will pay a $0.75 dividend at the end of the year, and grows at a rate of 8%? 9.62% 12.01% 10.14% 10.69% 11.23% Question 7 The beta coefficient is a measure of a stock's 5 pts
Stock in Nantec Corporation has a beta of 1.4. The market risk premium is 8%, and T-bills are currently yielding 5.5%. The company's most recent dividend was $2 per share, and dividends are expected to grow at a 5% annual rate indefinitely. If the stock sells for $42 per share, what is your best estimate of the company's cost of equity? 14.46% 13.35% 15.57%
Check into a Noel... 5 pts Question 4 Which if the following is most correct? The slope of the SML is a function of investors' risk aversion. All of the answers are correct. The intercept of the SML is the risk-free rate. The SML plot shows the required rate of return of assets having different betas. On the SML plot, beta is on the horizontal axis. Question 5 If D = $2.00, g = 6%, and Po = $8, what...
6. Within-firm risk and beta risk Understanding risks that affect projects and the impact of risk consideration Yatta Net International has manufacturing, distribution, retail, and consulting divisions. Projects undertaken by the manufacturing and distribution divisions tend to be low-risk projects, because these divisions are well established and have predictable demand. The company started its retail and consulting divisions within the last year, and it is unknown if these divisions will be profitable. The company knew that opening these new divisions...
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