finance-Investors expect the market rate of return this year to be 13.00%

QUESTION

2. Investors expect the market rate of return this year to be
13.00%. The expected rate of return on a stock with a beta of 1.6 is currently
20.80%. If the market return this year turns out to be 11.40%, how would you
revise your expectation of the rate of return on the stock?(Round
your answer to 1 decimal place.)
What
is revised rate of return?

3. The market price of a security is $70. Its expected rate of
return is 12%. The risk-free rate is 7%, and the market risk premium is 7%.
What will the market price of the security be if its beta doubles (and all
other variables remain unchanged)? Assume the stock is expected to pay a
constant dividend in perpetuity.
What
is the market price?

5. A share of stock is now selling for $125. It will pay a
dividend of $8 per share at the end of the year. Its beta is 1. What do
investors expect the stock to sell for at the end of the year?
Assume the risk-free rate is 7% and the expected rate of return
on the market is 19%.(Round your answer to 2 decimal places.)
What
is the expected selling price?

7.A stock has an expected return
of 6%. What is its beta? Assume the risk-free rate is 5% and the expected rate
of return on the market is 10%.(Negative value should be
indicated by a minus sign. Round your answer to 2 decimal places.)
Calculate
Beta

 

ANSWER:

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