Given the following for Stocki: PO 45.50 0.80 0.0300 E(rM) 0.1200 Bi rf News suddenly comes out that increases the perceived risk of the stock to Bi= 1.3 You still expect the stock to be worth the price you calculated above, however, to what price should the stock drop reflecting the new expectation for risk? 43.71 41.14 39.17 37.62 33.22

Given the following for Stocki: PO 45.50 0.80 0.0300 E(rM) 0.1200 Bi rf News suddenly comes out that increases the perceived risk of the stock to Bi= 1.3 You still expect the stock to be worth the price you calculated above, however, to what price should the stock drop reflecting the new expectation for risk? 43.71 41.14 39.17 37.62 33.22

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...

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