Capital Structure Assume that you have just been hired as business manager of Campus Deli(CD), located adjacent to the campus. Its Free Cash Flow(FCF) is $400,000. Because the university’s enrollment is capped, FCF is expected to be constant over time. Because no expansion capital is required, CD pays out all earnings as dividends. CD currently […]
Question and answer What is the market risk premium (rM – rRF)? Round your answer to two decimal places. What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places. What is the required return of Fund P? Do not round intermediate calculations. Round your answer to […]
8-2. PORTFOLIO BETA An individual has $20,000 invested in a stock with a beta of 0.6 and another$75,000 invested in a stock with a beta of 2.5. If these are the only two investments in her portfolio,what is her portfolio’s beta? 8-4. EXPECTED AND REQUIRED RATES OF RETURN Assume that the risk-free rate is 3.5% […]
