+1-415-315-9853

info@mywordsolution.com

## Finance

 Basic Finance Corporate Finance Financial Management Financial Econometrics Portfolio Management Risk Management Public Finance Business Law & Ethics

As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industries's stock as market conditions change. Suppose rRF = 5%, rM = 9%, and bUTI = 1.7.

What is rUTI, the required rate of return on UTI Stock? Round your answer to two decimal places.
%

Now suppose rRF increases to 6%. The slope of the SML remains constant. How would this affect rM and rUTI?

I. rM will remain the same and rUTI will increase by 1%.
II. rM will increase by 1% and rUTI will remain the same.
III. Both rM and rUTI will decrease by 1%.
IV.Both rM and rUTI will remain the same.
V. Both rM and rUTI will increase by 1%.

Suppose rRF decreases to 4%. The slope of the SML remains constant. How would this affect rM and rUTI?

I. Both rM and rUTI will remain the same.
II. Both rM and rUTI will decrease by 1%.
III. rM will decrease by 1% and rUTI will remain the same.
IV. rM will remain the same and rUTI will decrease by 1%.
V. Both rM and rUTI will increase by 1%.

Now assume rRF remains at 5% but rM increases to 11%. The slope of the SML does not remain constant. How would these changes affect rUTI?

I. rUTI will increase by 3.4%.
II. rUTI will remain the same.
III. rUTI will decrease by 3.4%.

Assume rRF remains at 5% but rM falls 8%. The slope of the SML does not remain constant. How would these changes affect rUTI?

I. rUTI will increase by 1.7%.
II. rUTI will remain the same.
III. rUTI will decrease by 1.7%.

Basic Finance, Finance

• Category:- Basic Finance
• Reference No.:- M924215

Have any Question?

## Related Questions in Basic Finance

### 1 explain the origin and purpose of real estate investment

1. Explain the origin and purpose of Real Estate Investment Trusts. 2. Name three primary market lenders that are not subject to banking regulations. 3. Describe a warehouse line of credit and who may use it. 4. Are ther ...

### 1 what are order effects and how does counterbalancing help

1. What are order effects, and how does counterbalancing help us deal with them? 2. Distinguish between treatment, confound, and error variance. 3. Which is worse--confound variance or error variance? Why?

### Taxable income- nick is married and has three children in

Taxable Income:- Nick is married and has three children in college. His wife is a homemaker. Nick has an adjusted gross income of \$37,400. If Nick's standard deduction is \$11,900, his itemized deductions are \$12,200, and ...

### Company x has a 7 percent semiannual coupon bonds that

Company X has a 7 percent semiannual coupon bonds that sells for \$976, has a face value of \$1,000, and has a yield to maturity of 8.079 percent. How many years will it be until this bond matures?

### An article in the wall street journal discussing the fear

An article in the Wall Street Journal discussing the fear that some farmers had that regulation of derivatives would make it harder for them to hedge risk, described the situation of a feedlot owner who "uses derivatives ...

### Questions1 calculate the value of a bond with pound100 face

Questions: 1) Calculate the value of a bond with £100 face value, 5 years to maturity, coupon rate of 7% p.a. paid annually, when the discount rate (expected rate of return on similar instruments) is 4% p.a. 2) Calculate ...

### A random sample of the birth weights of 186 babies has a

A random sample of the birth weights of 186 babies has a mean of 3103 g and a standard deviation of 691 g. Construct a 98% confidence interval estimate of the mean birth weight for all such babies. What is the confidence ...

### The following list contains several variables that

The following list contains several variables that differentiate college students. a. Select one variable from the list and then think of a second variable (on the list or one of your own) that should be positively relat ...

### 1 identity theft tactics name and explain at least three

1. Identity Theft Tactics. Name and explain at least three tactics used by identity thieves to obtain information. 2. Identity Theft. Can identity theft occur through legitimate access to your personal information? Expla ...

### Use psycinfo or a similar database to locate a research

Use PsycINFO or a similar database to locate a research study using a factorial design. (Note: You can try a subject term based on an area of interest, but the most direct path to finding factorial designs is to use a se ...

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

## 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

### Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

### Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

### Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

### Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

### Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen