- +1-530-264-8006
- info@tutorsglobe.com

What is a good estimate for your companys stock beta if

1. Stock A has a beta of 0.7, whereas Stock B has a beta of 1.3. Portfolio P has 50% invested in both A and B. Which of the following would occur if the market risk premium increased by 1% but the risk-free rate remained constant?

a. The required return for Stock A would fall, but the required return for Stock B would increase.

b. The required return on Portfolio P would remain unchanged.

c. The required return on both stocks would increase by 1%.

d. The required return on Portfolio P would increase by 1%.

e. The required return on Stock A would increase by more than 1%, while the return on Stock B would increase by less than 1%.

2. Given an unlevered beta of 1.30 and a corporate tax rate of 28.0%, what is a good estimate for your company's stock beta if your capital structure is 60.0% debt and 40.0% equity?

a) about 2.70

b) about 2.36

c) about 1.40

3. If a project has an initial outlay of $37,000 and cash flows of $13,000 per year for the next 5 years, what is the IRR of this project? (Answer to the nearest tenth of a percent, e.g. 12.3).

Expected delivery within 24 Hoursrs

18,76,764

Questions

Asked

21,311

Experts

9,67,568

Questions

Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment
## Q : You would like to purchase some equipment for your

you would like to purchase some equipment for your factory you have the option of purchasing the equipment today in 5