Question
The market price of a security is $52. Its expected rate of return is 9%. The risk-free rate is 5%, and the market risk premium
The market price of a security is $52. Its expected rate of return is 9%. The risk-free rate is 5%, and the market risk premium is 7%. What will the market price of the security be 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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School Finance Elections
Authors: Don E. Lifto, Bradford J. Senden, Daniel A. Domenech
2nd Edition
1607091488, 978-1607091486
