What is the new standard deviation of your firms stock


You are the manager of an all-equity firm whose stock has a beta of 1.13, volatility of 13.09%, and market capitalization of $769 million. You decide to acquire another firm. The all-equity firm you acquire has stock with a beta of 0.69, volatility of 25.98%, and market capitalization of $644 million. The stock returns of your firm and the firm you are acquiring have a correlation of 0.04. The current market risk premium is 4.81% and the current risk free rate is 2.8%. What is the new standard deviation of your firm's stock returns after this acquisition? Express your answer as a percentage rounded to two decimal places (e.g., 11.25% not 0.1125).

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Financial Management: What is the new standard deviation of your firms stock
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