FIN 305 Lecture Notes - Lecture 36: Risk-Free Interest Rate, Capital Asset Pricing Model, Financial Risk
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Which of the following types of risk do firms encounter: business risk, financial risk, portfolio risk, all of the above, none of the above. The correct answer is: d (read in textbook) Currently xyz company has a required return of 12% and a beta of 1. 2. According to the capm, xyz is: more risky than the market, less risky than the market, has an equal risk to the market, can"t be compared since the risk free rate is not known. This year the dough boy corporation had million in sales, . 5 million in operating costs, and million in interest expense. It also paid 35% of its pre- tax income to the government as income tax expense. What was dough boy"s net after-tax income for the year: . 275 million, million, . 225 million, none of the above, impossible to determine. Given the following information, calculate the required return on this firm"s securities:
