Thayer Farms Stock Has a Beta of 1

question 76

Multiple Choice

Thayer Farms stock has a beta of 1.12.The risk-free rate of return is 4.34 percent and the market risk premium is 7.92 percent.What is the expected rate of return on this stock?

• A)8.35 percent
• B)9.01 percent
• C)10.23 percent
• D)13.21 percent
• E)13.73 percent

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Definitions:

Day-To-Day Business

Refers to the regular, routine operations and activities carried out by a business or organization to maintain its function.

Responsible Person Doctrine

A legal principle that holds an individual in a business or enterprise accountable for ensuring compliance with tax laws and regulations.

Acting in Good Faith

A principle of honesty and fairness in dealings, implying the absence of fraud, deceit, or intent to deceive in a transaction or interaction.

Leveraged Buyout (LBO)

A takeover-resistance strategy in which a group within the target corporation buys all the corporate stock held by the public, thereby turning the company into a privately held corporation.