PORTFOLIO MANAGEMENT

Active 0 Reply 160 Views 2020-10-05 18:38:22 General

The Total market value of the equity share of O.R.E. Company is ` 60,00,000 and the total value of the debt is ` 40,00,000. The treasurer estimate that the beta of the stock is currently 1.5 and that the expected risk premium on the market on the market is 10 per cent. The treasury bill rate is 8 per cent.

 Required:

i. What is the beta of the Company’s existing portfolio of assets?

ii. Estimate the Company’s cost of capital and the discount rate for an expansion of the company’s business



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