subject
Business, 04.07.2020 01:01 wqijviquyuivqwy9672

Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New news arrives that does not change any of these numbers, but it does change the expected returns of the following stocks: Stock Expected Return Volatility Beta
Taggart Transcontinental 8% 28% 1.2
Rearden Metal 13% 40% 1.7
Wyatt Oil 7% 20% 0.8
Nielson Motors 10% 32% 1.3
Which of the following stocks represent buying opportunities?
1.Taggart Transcontinental
2. Rearden Metal
3. Wyatt Oil
4. Nielson Motors
a) 1 only
b) 2 & 4 only
c) 1 & 2 only
d) 2 & 3 only

ansver
Answers: 3

Another question on Business

question
Business, 22.06.2019 06:30
73. calculate the weighted average cost of capital (wacc) based on the following information: the equity multiplier is 1.66; the interest rate on debt is 13%; the required return to equity holders is 22%; and the tax rate is 35%. (a) 15.6% (b) 16.0% (c) 15.0% (d) 16.6% (e) none of the above
Answers: 2
question
Business, 22.06.2019 07:30
Most states have licensing registration requirements for child care centers and family daycare homes. these usually include minimum standard for operation. which of the following would you most likely find required in a statement of state licensing standards for child care centers?
Answers: 2
question
Business, 22.06.2019 10:10
conquest, inc. produces a special kind of light-weight, recreational vehicle that has a unique design. it allows the company to follow a cost-plus pricing strategy. it has $9,000,000 of average assets, and the desired profit is a 10% return on assets. assume all products produced are sold. additional data are as follows: sales volume 1000 units per year; variable costs $1000 per unit; fixed costs $4,000,000 per year; using the cost-plus pricing approach, what should be the sales price per unit?
Answers: 2
question
Business, 22.06.2019 15:20
Sauer food company has decided to buy a new computer system with an expected life of three years. the cost is $440,000. the company can borrow $440,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. assume interest is paid in full at the end of each year. a. how much would sauer food company save in interest over the three-year life of the computer system if the one-year loan is utilized and the loan is rolled over (reborrowed) each year at the same 12 percent rate? compare this to the 14 percent three-year loan.
Answers: 3
You know the right answer?
Assume that the CAPM is a good description of stock price returns. The market expected return is 8%...
Questions
question
Spanish, 25.09.2020 03:01