Financing Easy Question

Business & Finance
Tutor: None Selected Time limit: 1 Day

Apr 11th, 2015

3b) We need to calculate the weighted average beta of the portfolio. This is 160/500*0.4+120/500*1.8..... = 1.74. Now we use the security market line equation and get 3.0% + (7.6%)*1.74=16.22%. Kish's required rate of return is 16.22%.

3c) Kish would be indifferent to purchasing the stock at an expected rate of return of 16.22%, when the required rate equals the expected rate.

Apr 11th, 2015

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
Apr 11th, 2015
...
Apr 11th, 2015
Dec 9th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer