Given the Following Information,determine Which Beta Coefficient for Stock a Is

question 100

Multiple Choice

Given the following information,determine which beta coefficient for Stock A is consistent with equilibrium: E(k_i) = 8.5%; k_F = 4%; E(k_M) = 12%.

• A) 0.80
• B) 1.26
• C) 0.56
• D) 1.10
• E) 1.00

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Definitions:

Land Improvements

Enhancements made to a parcel of land to increase its value or usability, such as landscaping, fencing, and installation of utilities, which are usually depreciable over their useful life.

Buildings

Structures erected to serve as premises for business, residential, or other purposes, considered as fixed assets on a balance sheet.

Land

Land refers to the surface of the earth and any permanent fixtures attached to it, considered a fixed asset in accounting and not subject to depreciation.

Machinery and Equipment

Fixed assets used in the operations of a business that are expected to be used for multiple years.