The market price of a security is 65 its expected rate of, Ask an Expert

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The market price of a security is $65. Its expected rate of return is 12.2%. The risk-free rate is 5% and the market risk premium is 9.2%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)? Assume that the stock is expected to pay a constant dividend in perpetuity.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91774931

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