Assume that you are considering investing in Xerox common stock. ...

[nramada]

Assume that you are considering investing in Xerox common stock. You have found that its beta is +1.2 and you think a market risk premium should be 8.
 
  If you could earn 12 on risk-free Treasury securities, Xerox has a required return of ________.
  A)
 
  24.0
  B)
 
  14.4
  C)
 
  21.6
  D)
 
  22.4

Question 2

Conglomicorp Inc has 10.5 million shares of stock outstanding with a book value of 25 per share and a market value of 93 per share. The firm also has 40 million in retained earnings and a required rate of return of 8.
 
  What is the current market capitalization for the firm?
  A) 904,166,667
  B) 976,500,000
  C) 1,097,820,000
  D) 1,016,500,000

[lkoler]

Answer to Question 1

C

Answer to Question 2

B
Explanation: B) MKT CAP = P  Q = 93  10.5m shares = 976,500,000.

[nramada]

Thanks for the timely response, appreciate it

[shailee]

Gracias!