Ask Question, Ask an Expert


Ask Basic Finance Expert

AKA's stock is currently selling for $11.44. This year the firm had earnings per share of $2.80 and the current dividend is $0.68. Earnings are expected to grow 7% a year in the foreseeable future. The risk-free rate is 10 percent and the expected market return is 14.2 percent. What will be the effect on the price of AKAs' stock if systematic risk increases by 40 percent, all other factors remaining constant?
an increase of $1.14
a decrease of $0.40
a decrease of $1.99
cannot determine from the given data

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926473

Have any Question? 

Related Questions in Basic Finance

Explain the concept of cost of capital how may cost of

Explain the concept of cost of capital. How may cost of capital affect long-term financial decisions? Would a company prefer to have a high or low cost of capital? Why? What was the effect of cost of capital on long-term ...

1downward motors has offered vicki either a 2000 rebate or

1. Downward motors has offered Vicki either a $2000 rebate or a 2%, 4-year loan on the new SUV she is purchasing for $33,000 with a $3,000 down payment. Vicki has done her homework and knows that she can get a 6%, 4-year ...

Many people claim that playing the stock market is like

Many people claim that playing the stock market is like gambling. How is this true or not true? What should be one's approach to the stock market? Please no plagiarism. cite sources.

Defend the following statement once an innovation appears

Defend the following statement: Once an innovation appears, it will remain even after the impetus for its development disappears. Give an example.

1 youve decided to capitalize 100 of your new business by

1. You've decided to capitalize 100% of your new business by obtaining a loan from a local bank. Your initial funding will A. include personal and equity financing. B. include equity and start-up financing. C. consist of ...

Why did the mexican government establish a controlled

Why did the Mexican government establish a controlled foreign-exchange market, and why did that market differ from the free market?

In country a suppose that changes in short-term interest

In Country A suppose that changes in short-term interest rates translate quickly into changes in long-term interest rates, while in Country B long-term interest rates do not respond much to changes in short-term rates. I ...

Finance reporton the 4th of october 2016 the reserve bank

Finance Report On the 4th of October 2016, the Reserve Bank of Australia (RBA) board will meet to discuss domestic and global economic conditions and release its monetary policy statement, having decided upon the appropr ...

Causes and effects of the global financial crisis of


Assume the effective 6-month interest rate is 2 and the

Assume the effective 6-month interest rate is 2% and the S&R 6-month forward price is $1020 The premiums for S&R options with 6 months to expiration are as follows: Strike call put $950 $120.405 $51.777 1000 93.809 74.20 ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate