You are provided data on three companies listed in Alternative Investments Market (AIM) in the United Kingdom.

Question:

You are provided data on three companies listed in Alternative Investments Market (AIM) in the United Kingdom. Assume the risk-free rate and the market index return is 3 percent and 5 percent, respectively.

image text in transcribed

Use the CAPM to calculate the required rate of returns on the companies. What is beta on an equally weighted portfolio of the 3 stocks?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Foundations Of Finance

ISBN: 9781292155135

9th Global Edition

Authors: Arthur J. Keown, John D. Martin, J. William Petty

See More Books

Question Posted: Feb 21, 2024 05:01 AM

See More Questions

In general, students are expected to meet the following objectives: 1) To ascertain cost of capital for a new project by using cost of capital of existing firms operating in the same business. (2)...
Analyse questions 1 until 6 and write a report. Take note that this report is meant Mr Ramli who is not well verse in finance. Hence, you need to explain the intuition behind your calculations. For...
TOPIC 2: Project Formulation, Management, Monitoring and Evaluation Learning Assessment: Read and understand, then answer the following: For Submission of output: Pls keep always your output ready...
The temperature of air changes from 0 to 10C while its velocity changes from zero to a final velocity, and its elevation changes from zero to a final elevation. At which values of final air velocity...
Determine the number of zeros of the polynomial function. 1. f (x) = x3 + 2x2 + 1 2. f (x) = x4 3x 3. g (x) = x4 x5 4. f (x) = x3 x6 5. f (x) = (x + 5)2 6. h (t) = (t 1)2 (t + 1)2
Please Help with this linux problem. Like virtually any modern operating system, Linux distributions come equipped with file management software, for instance the 'Files' app on Fedora. But some...
2. What classifications of fund balance are currently allowed and which ones are no longer allowed? 13Criteria for classification of the converted revenues and expenses into the program and function...
1. To compute the price elasticity of demand, we divide the percentage change in_______ by the percentage change in _______and then take the _______value of the ratio. 2. If a 10 percent increase in...
8. Risk and return Suppose Janet is choosing how to allocate her portfolio between two asset classes: risk-free government bonds and a risky group of diversified stocks. The following table shows the...
The data shared below is extracted from Financial Times website on the betas of four companies listed in the FTSE 100 market index in the UK namely Vodafone, Tesco, British Petroleum, and British...
Visit the Financial Times Web site and refer to the article A step-by-step guide to asset allocation to apply the six main steps on asset allocation on a portfolio of shares of your choice listed on...
In 2009, Citigroup used the fair value option for some of its own debt. During the first quarter of 2009, the fair value of its debt declined by $2.7 billion. Its reported net income for the quarter...
Problem 2.01 An ant is crawling along a straight wire, which we shall call the x axis, from A to B to C to D (which overlaps A), as shown in the figure below. O is the origin. Suppose you take...
In a separate C++ program, do the following: a) Create an unordered linked list by declaring a linked list of the unordered LinkedList type. You may assume that this list is to be comprised of...
TranscribedText: El. You are sitting at a table that has a solid round top {5.1"} kg] and a single solid cvlindrical leg {4. kg) [see figure, note that the tilt angle is exaggerated to he...
The municipal mill rate in the neighbourhood is 22.375 mills. There is an educational mill rate of 11.35 mills. The following list is the municipalities planned local improvement costs for the next...
Maggie Company had the following functional income statement for the month of May, 2020: MAGGIE COMPANY Functional Income Statement For the Month Ending May 31, 2020 Sales (30,000 units) $300,000...
Balance this redox reaction by inspection. S8 + O2 ( SO2
Hotel Majestic is interested in estimating fixed and variable costs so that the company can make more accurate projections of costs and profit. The hotel is in a resort area that is particularly busy...
Describe the composition of the project team. How important was this? Why?
Why do you think the implementation of Snohomish PUD's new human resource system was successful? Explain your answer.
Assess the importance of the Philly311 project for the city of Philadelphia and its citizens.
Saly paid $52,000 a year paid on a weekly basis. last pay she had $250 withheld in Income Tax, $48.97 for CPP and $15.80 for EI. an additional $and 25.00 in tax are deducted each pay. She allowed to...
Required information [The following information applies to the questions displayed below.] Dain's Diamond Bit Drilling purchased the following assets this year. Asset Drill bits (5-year) Drill bits...
Which of the following partnership items are not included in the self-employment income calculation? Ordinary income. Section 179 expense. Guaranteed payments. Gain on the sale of partnership...

You are provided data on three companies listed in Alternative Investments Market (AIM) in the United Kingdom.

Question:

STOCK Abbey pic 1PM plc 32Red plc BETA 0.3407 1.80 0.377

Step by Step Answer:

Calculating Required Rate of Return using CAPM Based on the Capital Asset Pric...View the full answer

Foundations Of Finance

Students also viewed these Business questions