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

question 34

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 for Simmons' common is:

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

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Definitions:

Director Serve

The role or term during which an individual serves on a board of directors for an organization or corporation.

Corporate Directors

Individuals elected by shareholders to manage a corporation's affairs and make major decisions.

Articles

Short for "articles of incorporation," which are documents filed with a government body to legally document the creation of a corporation.

Bylaws

Rules and regulations that govern a corporation’s internal management.