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Beta Coefficient
Memelissa
Oct 1, 2007, 12:39 PM
Given the following information, determine the beta coefficient for Stock J that is consistent with equilibrium: rj = 12.5%; rfr =4.5%; rm = 10.5%.
ake_finance
Oct 1, 2007, 08:14 PM
rj = rfr + beta(rm-rfr)
12.5 = 4.5 + beta(10.5-4.5)
beta = 1.3333