Question
can you help with the 3 quiz questions below.they are short Stock A has a beta of 1.7 and has the same rewardto- risk ratio
can you help with the 3 quiz questions below.they are short
Stock A has a beta of 1.7 and has the same rewardto- risk ratio as stock B. Stock B has a beta of .8 and an expected return of 12 percent. What is the expected return on stock A if the risk-free rate is 4.5 percent? Select one: a. 20.44 percent b. 16.67 percent c. 14.46 percent d. 18.97 percent e. 12.89 percent
And next question
T.L. C. Enterprises just revised its capital structure from a debt-equity ratio of 0.30 to a debt-equity ratio of 0.45. The firm's shareholders who prefer the old capital structure should: Select one: a. borrow funds and purchase more shares. b. sell some shares and hold the sale proceeds in cash. c. do nothing. d. sell all of their shares and loan out the entire sale proceeds. e. sell some shares and loan out the sale proceeds.
And
Which one of the following supports the theory that the value of a firm increases as the firm's level of debt increases? Select one: a. M&M Proposition II, without taxes b. No theory suggests this. c. M&M Proposition I, with taxes d. Static theory of capital structure e. M&M Proposition I, without taxes
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