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Author Question: A common stock currently has a beta of 1.3, the risk-free rate is an annual rate of 6 percent, and ... (Read 84 times)

krzymel

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Question 1

________ stocks are stocks for which the stock price is low compared to earnings or to the accounting value of the firm's assets.
◦ Value
◦ Growth
◦ Technical
◦ High dividend yield
◦ Fundamental

Question 2

A common stock currently has a beta of 1.3, the risk-free rate is an annual rate of 6 percent, and the market return is an annual rate of 12 percent. The stock is expected to generate per-share benefits of $5.20 during the coming period. A toxic spill results in a lawsuit and potential fines, and the beta of the stock jumps to 1.6. Assuming zero growth, the new equilibrium price of the stock
◦ will be $37.68.
◦ will be $43.33.
◦ will be $33.33.
◦ cannot be determined from the information given.


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Marked as best answer by krzymel on Apr 25, 2021

emilymalinowski12

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krzymel

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)


dantucker

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Reply 3 on: Yesterday
:D TYSM

 

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