4. Calculate the variance of the following returns. Year Return 1 -0.20 2 0.04...
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4. Calculate the variance of the following returns.
Year Return
1 -0.20
2 0.04
3 -0.14
4 0.25
5 0.14
Enter the answer with 6 decimals, e.g. 0.123456.
5. A stock has an expected return of 0.10, its beta is 0.95, and the expected return on the market is 0.05. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123.
1. The Down and Out Co. just issued a dividend of $1.17 per share on its common stock. The company is expected to maintain a constant 0.05 growth rate in its dividends indefinit ely. If the stock sells for $27.71 a share, what is the company's cost of equity? Enter the answer with 4 decimals (e.g. 0.1234)
2. The Up and Coming Corporation's common stock has a beta of 0.74. If the risk-free rate is 0.04 and the expected return on the market is 0.07, what is the company's cost of equity capital? Enter the answer with 4 decimals (e.g. 0.1234).
3. Holdup Bank has an issue of preferred stock with a $0.52 stated dividend that just sold for $47.38 per share. What is the bank's cost of preferred stock?
Enter the answer with 4 decimals (e.g. 0.1234).
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