Student Solution

-->

"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

1 University

1 Course

1 Subject

Finance for Managers_Discussion 5

Finance for Managers_Discussion 5

Q Through the use of a reliable source such as YahooFinance.com or ValueLine.com, determine your company’s beta. Also, find the beta for a competitor (a firm in the same line of business). Which of these is a riskier company based on this information? Why do you think the market deems this firm as riskier?

View Related Questions

Solution Preview

Beta can be regarded as the risk or volatility of a specific stock in comparison to the whole stock market’s volatility. Beta can be regarded as the indicator of the riskiness of a specific stock and its use is to assess expected return rate. Beta Calculation of General Electric Company Equity Cost = 7.24% ("General Electric Co WACC % (GE)", 2018). Risk-free return rate = 2.98% ("General Electric Co WACC % (GE)", 2018).