Question
The market price of a security is $50.Its expected rate of return is 13%.The riskless rate is 4% and the market risk premium is 6%.What
The market price of a security is $50.Its expected rate of return is 13%.The riskless rate is 4% and the market risk premium is 6%.What will be the market price of the security if its beta doubles (and all other variables remain unchanged)? Assume the stock is expected to pay a constant dividend in perpetuity.
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Financial Theory and Corporate Policy
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
4th edition
321127218, 978-0321179548, 321179544, 978-0321127211
