Vera Paper's Stock Has a Beta of 1

question 9

Multiple Choice

Vera Paper's stock has a beta of 1.40,and its required return is 12.00%.Dell Dairy's stock has a beta of 0.80.If the risk-free rate is 4.75%,what is the required rate of return on Dell's stock?

• A)8.45%
• B)8.67%
• C)8.89%
• D)9.12%

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Definitions:

Marginal Subcontracting Cost

The additional cost incurred for subcontracting one more unit of production or service.

Layoff Cost

refers to the expenses associated with terminating employees, including severance payments, benefits continuation, and administrative costs.

Hiring And Training Cost

The cumulative expenses related to recruiting new employees and providing them with necessary training to perform their job duties effectively.

Labor Hours

Labor hours refer to the total number of hours worked by employees or workers within a specific timeframe, often used to measure productivity or calculate labor costs.