Sign of correlation between the expected return, Finance Basics

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Sign of correlation between the expected return

Consider the following stocks, all of which will pay a liquidating dividend in a year and nothing in the interim:

Market Capitalization ($ million) Expected Liquidating Dividend ($ million) Beta

Stock A 800 1000 0.77

Stock B 750 1000 1.46

Stock C 950 1000 1.25

Stock D 900 1000 1.07

a. Calculate the expected return of each stock.

b. What is the sign of correlation between the expected return and market capitalization of the stocks?

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Finance Basics: Sign of correlation between the expected return

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Finance Basics: Sign of correlation between the expected return

Reference No:- TGS039188

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Find federal funds rate if the economy was in a recession

Q : Compare the gross margins for starbucks and peet

Q : Amount of bad debt expense for the period

Q : Amount of interest revenue problem

Q : Sign of correlation between the expected return

Q : Draw a cheese market for the us showing world price

Q : Duration rule and duration-with-convexity rule

Q : Allowance method writes off an uncollectible account

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Sign of correlation between the expected return

Reference No:- TGS039188

Recent Questions Asked Finance Basics

Q : Find federal funds rate if the economy was in a recession

Q : Compare the gross margins for starbucks and peet

Q : Amount of bad debt expense for the period

Q : Amount of interest revenue problem

Q : Sign of correlation between the expected return

Q : Draw a cheese market for the us showing world price

Q : Duration rule and duration-with-convexity rule

Q : Allowance method writes off an uncollectible account

Q : What is the ac minimizing quantity for a single firm

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