As Financial Manager of Material Supplies Inc

question 41

Multiple Choice

As financial manager of Material Supplies Inc., you have recently participated in an executive committee decision to enter into the plastics business.Much to your surprise, the price of the firm's common stock subsequently declined from $40 per share to $30 per share.While there have been several changes in financial markets during this period, you are anxious to determine how the market perceives the relevant risk of your firm.Assume that the market is in equilibrium.From the following data you find that the beta value associated with your firm has changed from an old beta of ____ to a new beta of ____.

• A) 2.00; 1.50
• B) 1.50; 3.00
• C) 2.00; 3.17
• D) 1.67; 2.00
• E) 1.50; 1.67

---

Definitions:

Perceptions

The process of organizing, interpreting, and making sense of sensory information.

Work Arrangement

The specific setup or organization of work roles and schedules, including aspects like telecommuting and flexible hours.

Flexibility

The capacity to adapt, change, and be versatile in thoughts, actions, or decisions in response to varying situations or demands.

Motivational Practices

Strategies or approaches used to inspire and encourage individuals or teams to achieve their goals.