Chapter%2013

Chapter%2013 - 0.80 Expected Return Stock...

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CHAPTER 13 Page 433 # 13 ER = 5.2 + (5.8 * 1.05) = 11.29% note: 11% market return - 5.2 RFR = 5.8% Market Risk Prem # 14 10.2 = 4.5 + (8.5 * b) 5.7 = 8.5 b Beta = 0.67 # 15 13.5 = 5.5 + (X * 1.17) X = 6.84 Market Risk Premium 5.50 12.34 % Market Return # 16 14 = X + ((11.5 - X) * 1.45) 14 = X + 16.675 - 1.45 X 0.45 X = 2.675 X = 5.94 % Risk Free Rate
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CHAPTER 13 Ques # 3 Page 430 a) Systematic b) Unsystematic c) Systematic d) Unsystematic e) Unsystematic f) Systematic CHAPTER 13 Expected Market Return 11.00 % Risk Free Rate 2.00 % Beta Stock "A"
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Unformatted text preview: 0.80 Expected Return Stock "A" ??? ER (A) = 2.0 + (9 * 0.80) ER (A) = 2.0 + 7.2 ER (A) = 9.2 % CHAPTER 13 Expected Market Return 12.00 % Risk Free Rate 3.00 % Expected Return Stock "A" 12.90 % Beta Stock "A" ??? 12.9 = 3.0 + (9 * b) 9.9 = 9.0 b Beta = 1.10 CHAPTER 13 Expected Market Return 10.50 % Beta Stock "A" 1.20 Expected Return Stock "A" 12.10 % RISK FREE RATE ??? 12.1 = X + ((10.5 - X) * 1.20 12.1 = X + 12.60 - 1.20 X 0.20 X = 0.50 X = 2.50 % Risk Free Rate...
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Chapter%2013 - 0.80 Expected Return Stock...

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