Financial management and analysis phần 4 docx

Security Market Line that Describes the Relation Between Expected
Asset Returns and Beta
Security Betas of U.S. Companies’ Common Stock
Company Industry Security Beta
Security Security Beta Amount Invested



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Investment Expected Return Standard Deviation
Stock Expected Return Standard Deviation Security Beta
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Competitor’s Reaction Probability Sales

Economic
Scenario
Probability of
Economic Scenario
Possible Outcome
for Investment 1
Possible Outcome
for Investment 2
Possible Interest Rate Probability of Interest Rate
Correlation
Coefficient
of Returns on
Securities A and B
Portfolio
Return
Covariance
between
Returns on
Securities A and B
Portfolio
Variance
Portfolio
Standard
Deviation
Proportion
of Portfolio
Invested in
Asset P
Proportion
of Portfolio

Invested in
Asset Q
Portfolio
Return
Covariance
Between
Returns on
Assets P and Q
Portfolio
Variance
Portfolio
Standard
Deviation
Security Security Beta
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Cost of Debt at Varying Tax Rates
Marginal Tax Rate After-Tax Cost of Debt
*

Implicit Interest on a Zero-Coupon Bond
Year
End-of-Period
Accrued Value
Previous-Period
Accrued Value
Implicit
Interest