3. The data below describe a three-stock financial market that satisfies the single-index model: Stock Beta Return Standard deviation Capitalization 3000 m.u A 1.2 10% 40% B 1940 m.u 0.2 2% 30% C 1360 m.u 1.7 17% 50% The standard deviation of the market index portfolio is 25%. a. What is the return of the market portfolio? b. What is the covariance between stock A and the market? c. Break down the variance of stock B into its systematic and firm-specific components

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A: The future value of annuities will includes the amount being deposited and amount of compounded…

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Q: What is the correlation coefficient of the returns of the stock and the returns of the market?

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A: The total number of days that a company takes to convert its resources into cash is known as the…

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A: To calculate the beta of stock we will use the below formula   Beta = (Expected return-Risk free…

Q: In estimating continuing value, how does assuming that RONIC is equal to WACC affect the importance…

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Q: The correlation of returns between A and B is:

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A: The stock is the part of the ownership of the company given in return for the capital paid.

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Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.