Suppose That the Simmons Corporation's Common Stock Has a Beta

question 41

Multiple Choice

Suppose that the Simmons Corporation's common stock has a beta of 1.6. If the risk-free rate is 5% and the market risk premium is 4%,the expected return on Simmons' common stock is:

• A) 4.0%.
• B) 5.0%.
• C) 5.6%.
• D) 10.6%.
• E) 11.4%.

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Definitions:

Trucks

Motor vehicles designed for transporting cargo, varying in size and capacity, and playing a crucial role in overland freight movement.

Finished Products

Goods that have completed the manufacturing process and are ready for sale to customers.

Materials Handling

The movement, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, consumption, and disposal.

Pull Systems

A method of inventory control in which production is based on customer demand rather than forecasted demand, thereby reducing waste in the system.