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STATS Problems with Solution

Question # 00013427
Subject: Statistics
Due on: 05/12/2014
Posted On: 04/25/2014 04:49 AM

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Which is the standard deviation of the returns on Stock A from 2000 to 2009 closest to?
Year End Stock A Realized Return (R - R) (R - R)2
2000 46.3% 29.85% 0.0891023
2001 26.7% 10.25% 0.0105063
2002 86.9% 70.45% 0.4963203
2003 23.1% 6.65% 0.0044223
2004 0.2% -16.25% 0.0264063
2005 -3.2% -19.65% 0.0386123
2006 -27.0% -43.45% 0.1887903
2007 27.9% 11.45% 0.0131103
2008 -5.1% -21.55% 0.0464403
2009 -11.3% -27.75% 0.0770063
A) 33.2%
B) 16.4%
C) 31.5%
D) 11.0%




Your firm is planning to invest in a new generation system. Galt industries is an all equity firm that specializes in the business. Suppose Galt's equity beta is 0.75, the risk-free rate is 3%, and the market risk premium is 6%. If your firm's project is all equity financed, then which is your estimate of your cost of capital closet to?



a) 5.25%


b)6.00%


c)6.75%


d)7.50%

Tags solution problems stats equity stock firm busine specializes suppose beta riskfree galts galt planning invest generation rate industries market closet capital b600 d750 c675 cost estimate premium risk firms project financed

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STATS Problems with Solution

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Preview: = x 01100797)^(1/2) x 332 or xx 2%Your firm xx planning xx xxxxxx in x new generation xxxxxx Galt industries xx an.....
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