Bama Entertainment Has Common Stock with a Beta of 1

question 12

Multiple Choice

Bama Entertainment has common stock with a beta of 1.22.The market risk premium is 8.1 percent and the risk-free rate is 3.9 percent.What is the expected return on this stock?

• A)13.31 percent
• B)12.67 percent
• C)12.40 percent
• D)13.78 percent
• E)14.13 percent

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Definitions:

Runaway Slaves

Enslaved people who escaped from their enslavers in pursuit of freedom, often facing severe risks and hardships.

Confederate Ships

Naval vessels that were operated by the Confederate States during the American Civil War to fight against the Union.

Enlist

To voluntarily sign up for military service or, more broadly, to join an organization or cause.

Union Forces

The armed forces of the United States (the North) during the American Civil War.