Stock Y Has a Beta of 1

question 98

Multiple Choice

Stock Y has a beta of 1.28 and an expected return of 13.7 percent.Stock Z has a beta of 1.02 and an expected return of 11.4 percent.What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

• A)2.38 percent
• B)2.76 percent
• C)3.23 percent
• D)3.69 percent
• E)4.08 percent

Understand the accounting treatments for liabilities, specifically unrecorded liabilities in consolidation.

Comprehend the treatment of asset revaluation in business combinations and its effect on financial statements.

Recognize the treatment of intragroup transactions and their tax implications.

Understand the requirements for recognizing contingent assets and liabilities in a business combination.

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