a firms asset beta can be measured by:
1) considered the nature of the firms product and its price and income elasticity.
2) considering the aggressive or conservative nature of the firms business strategy.
3) the extent of the procylicality of the business sector in which the firm lies.
4) regressing past asset returns on market portfolio returns.
Answer all of the above
Two firms have the same asset beta but different equity betas. The direct cause is likely: a. The importance of variable costs varies across these firms b. The firms have different proportions of debt relative to equity b. One firm’s sales are more cyclical than the other c. All of the above d. None of the above
5. The beta of asset A is 1.3, and the beta of asset B is -0.2. What is the beta of a portfolio that invests $100 in asset A and goes short $50 of asset B?
Question: The asset beta of a levered firm is 1.4. The beta of debt is 0.5. If the debt to value ratio is 0.3, what is the equity beta? Formula: Equity beta = Asset beta + Debt to equity ratio * (Asset beta - Beta of Debt) *the debt to equity ratio is NOT given. I must find the debt to equity ratio first to complete the answer. Only the debt to value ratio is provided.
Explain 1) the factors that determine a security’s beta and 2) how asset beta relates to equity beta.
an asset with a beta less than 1:
tions the Beta What is the value of Risk Premium for Asset 2 What is the value of Market Risk Premium for A 3. What is the value of Beta for Asset A? 4. If Beta for Asset A decreased to 1.5, what would
Considering two firms, Alpha and Beta, the sales, profits, and assets of Alpha are $20 million $4 million and $40 million respectively, whereas Beta's sales, profits, and assets are $8 million $2 million, and $20 million, respectively, (1) What's the return on assets for each firm? 12) Applying the Du Pont system here to analyze the return on assets, what information you could further obtain by utilizing this method? (3) Please give me a famous brand of firm regarding each...
Considering two firms, Alpha and Beta, the sales, profits, and assets of Alpha are $20 million, $4 million, and $40 million respectively, whereas Beta's sales, profits, and assets are $8 million, $2 million, and $20 million, respectively. (1) What's the return on assets for each firm? (2) Applying the Du Pont system here to analyze the return on assets, what information you could further obtain by utilizing this method? (3) Please give me a famous brand of firm regarding each...
Which of the following methods involves calculating an average beta for comparable firms and using that beta to determine a project's beta? a. Risk premium method b. Pure play method c. Accounting beta method d. CAPM method
2. Is it possible that a risky asset could have a beta of zero? Explain. Based on the CAPM, what is the expected return on such an asset? Is it possible that a risky asset could have a negative beta? What does the CAPM predict about the expected return on such an asset?