The Market Expected Return Is 14% with a Standard Deviation

question 35

Multiple Choice

The market expected return is 14% with a standard deviation of 18%.The risk-free rate is 6%.Security XYZ has just paid a dividend of $1 and has a current price of $13.95.What is the beta of Security XYZ if its dividend is expected to grow at 6% per year indefinitely?

• A)0.85
• B)0.90
• C)0.95
• D)1.05

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Definitions:

Unit Costs

The amount of expenditure incurred to create a single unit of a product or service.

Cost Of Production Report

A document detailing the total cost associated with the production of goods over a specific period, including materials, labor, and overhead.

Conversion Cost

The combined cost of labor and manufacturing overheads spent on converting raw materials into finished goods.

Direct Materials

Basic substances that can be directly linked to the manufacture of a particular product or service.