(Solved by Humans)-1. If a stock has a higher Beta, what impact will that have on

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Academic Level: Undergrad. (yrs 3-4)

Paper Format: APA

Pages: 5 Words: 1375

Question

1. If a stock has a higher Beta, what impact will that have on its expected return?

a. Expected return will be higher due to the risk/return tradeoff of a riskier stock

  • b.?Expected return will be higher due to the increase in market risk premium
  • c. Expected return will be lower due to the risk/return tradeoff of a riskier stock
  • d.?Expected?return?will?be?lower?due?to?the?larger??discount?factor
  • 1. The main importance of the WACC is:
  • a. To help calculate interest expense??????????????????
  • b. To forecast the effective tax rate
  • c.?To evaluate investment opportunities
  • d. To evaluate profit margin


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