This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: You have been given an opportunity to invest in a stock. Recent trends suggest that a one percent ... (Read 14 times)

Evvie72

  • Hero Member
  • *****
  • Posts: 519
on: Jul 1, 2018
You have been given an opportunity to invest in a stock. Recent trends suggest that a one percent rise in the stock market leads to approximately a two and one-half percent rise in the price of this stock.
 
  The real risk-free rate currently stands at 6 and stocks on average have provided 12 returns. Using the capital asset pricing model, determine the appropriate discount rate for the stock in question.

Question 2

Those who engage in the practice of discrimination today are generally quite blatant.
 
  Indicate whether the statement is true or false


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

sylvia

  • Sr. Member
  • ****
  • Posts: 331
Reply #1 on: Jul 1, 2018
Answer to Question 1

Discount rate = rf + (rm - rf)
 = 2.5
R = 6 + 2.5(12  6 )
R = 6 + 15
= 21

Answer to Question 2

F


Evvie72

  • Member
  • Posts: 519
Reply 2 on: Jul 1, 2018
:D TYSM

Missbam101

  • Member
  • Posts: 341
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

Congestive heart failure is a serious disorder that carries a reduced life expectancy. Heart failure is usually a chronic illness, and it may worsen with infection or other physical stressors.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

Allergies play a major part in the health of children. The most prevalent childhood allergies are milk, egg, soy, wheat, peanuts, tree nuts, and seafood.

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Independent assortment produces 50 percent recombinants Independent assortment produces 50 percent recombinants
Phobos transits the Sun, as seen by Mars Rover Opportunity on March 10, 2004 Phobos transits the Sun, as seen by Mars Rover Opportunity on March 10, 2004
Walter Thompson saw his assets evaporate during the stock market collapse in 1929. Desperate for ... Walter Thompson saw his assets evaporate during the stock market collapse in 1929. Desperate for ...
Harlem’s Promise Academy has a record of graduating and sending to college more than 90 percent ... Harlem’s Promise Academy has a record of graduating and sending to college more than 90 percent ...
Predicted Temperature Trends Through the 21st Century Predicted Temperature Trends Through the 21st Century
Belief that premarital sex is “not wrong at all,” Canada, 1975—2016 (in percent) Belief that premarital sex is “not wrong at all,” Canada, 1975—2016 (in percent)
Video: Double Stranded DNA Molecule Animation

For a complete list of videos, visit our video library