Using Yahoo! Finance find the value of beta for your reference company. Write a two page paper discussing the following items:What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?Given the beta of your company, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5\% annually) and an assessment that the market risk premium (that is – the difference between the expected rate of return on the market portfolio and the risk-free rate of interest) is 6.5\%, use the CAPM equation in order to find out what is the present cost of equity of your company? Explain what is the meaning of the cost of equity.Choose two other companies, look up their Beta and report the names of these companies and their betas. Suppose you invest one third of your money in each of the stocks of these companies. What will the beta of the portfolio be? Given the data in (b), what will the Expected Rate of Return on this portfolio be? Do you feel that the three-stock portfolio is sufficiently diversified or does it still have risk that can be diversified away? Explain.In a two-page report explain your answers thoroughly with references to the background materials. Make sure to demonstrate a strong understanding of the concept of beta and the risk/return trade off.
Why Choose Us
- 100% non-plagiarized Papers
- 24/7 /365 Service Available
- Affordable Prices
- Any Paper, Urgency, and Subject
- Will complete your papers in 6 hours
- On-time Delivery
- Money-back and Privacy guarantees
- Unlimited Amendments upon request
- Satisfaction guarantee
How it Works
- Click on the “Place Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
- Fill in your paper’s requirements in the "PAPER DETAILS" section.
- Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
- Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
- From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.