Thompson Home Remodeling has a 1.40 beta. If the overall stock market increases by 4 percent,...

Question

Question

Answer 1

Answer #1

Answer:-

Given

Thompson home remodeling beta = 1.4
This means it is 1.4 times volatile than the overall market
The overall stock market increases by 4 %

The the stock of Thompson home remodeling could rise change by = beta x increase in stock market = 1.4 x 4% = 5.6 %

Answer 2

Similar Homework Help Questions

Ford Motor Company has a beta of 1.55. If the overall stock market increases by 6...

Ford Motor Company has a beta of 1.55. If the overall stock market increases by 6 percent, based on this information, how much should investors assume that Ford will increase? (Enter your answer as a percent rounded to 2 decimal places.) Volatility for Ford Motor company stock
A stock has an expected return of 13.5 percent, its beta is 1.40, and the expected...

A stock has an expected return of 13.5 percent, its beta is 1.40, and the expected return on the market is 11.5 percent. What must the risk-free rate be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
A stock has a beta of 1.38, the expected return on the market is 10 percent,...

A stock has a beta of 1.38, the expected return on the market is 10 percent, and the risk- free rate is 5 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 3 11.90% Expected return points еВook Print References

A stock has a beta of 1.2, the expected return on the market is 11.4 percent,...

A stock has a beta of 1.2, the expected return on the market is 11.4 percent, and the risk- free rate is 4.75 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return
A stock has a beta of 115, the expected return on the market is 10.3 percent,...

A stock has a beta of 115, the expected return on the market is 10.3 percent, and the risk-free rate is 31 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) Expected retum
A stock has a beta of 1.22the expected return on the market is 12 percent, and...

A stock has a beta of 1.22the expected return on the market is 12 percent, and the risk- free rate is 4.65 percent. What must the expected return on this stock be? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %

A stock has a beta of 1.14, the expected return on the market is 10.9 percent,...

A stock has a beta of 1.14, the expected return on the market is 10.9 percent, and the risk-free rate is 3.6 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return
A stock has a beta of 1.14, the expected return on the market is 10.9 percent,...

A stock has a beta of 1.14, the expected return on the market is 10.9 percent, and the risk-free rate is 3.6 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return
A stock has a beta of 1.25, the expected return on the market is 15 percent,...

A stock has a beta of 1.25, the expected return on the market is 15 percent, and the risk-free rate is 4.60 percent. What must the expected return on this stock be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Expected 13.50 % return 15

Stock in CDB Industries has a beta of 1.10. The market risk premium is 7.2 percent,...

Stock in CDB Industries has a beta of 1.10. The market risk premium is 7.2 percent, and T- bills are currently yielding 4.1 percent. The most recent dividend was $2.56 per share, and dividends are expected to grow at an annual rate of 5 percent indefinitely. If the stock sells for $45 per share, what is your best estimate of the company's cost of equity? (Do not round intermediate calculations and enter your answer percent rounded to 2 decimal places,...