Consider the CAPM

question 83

Multiple Choice

Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 15%. What is the beta on a stock with an expected return of 17%?

• A) .5
• B) .7
• C) 1
• D) 1.2

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Definitions:

Additional Paid-In Capital

Additional Paid-In Capital (APIC) is the amount of money that investors have paid for shares above their nominal value during public offerings, reflecting capital that a company receives in excess of the par value of its stock.

Business Combination

A business combination occurs when two or more businesses merge or when one business acquires another, resulting in the consolidation of assets and liabilities under one entity.

Consolidated

Consolidated refers to the combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations as if the group were a single entity.

Business Combination

A business combination is a transaction or event where an acquirer obtains control of one or more businesses, often in the form of mergers, acquisitions, or consolidations.