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A stock has an expected return of 18.00%. The risk-free rate is 1.58% and the market...

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Finance

A stock has an expected return of 18.00%. The risk-free rate is1.58% and the market risk premium is 8.24%. What is the ? of thestock?

Answer format: Number: Round to: 2 decimalplaces.

The risk-free rate is 1.64% and the market risk premium is6.38%. A stock with a ? of 1.65 just paid a dividend of $1.29. Thedividend is expected to grow at 21.18% for three years and thengrow at 3.15% forever. What is the value of the stock?

Answer format: Currency: Round to: 2decimal places.

Unsure if I'm doing the process right. Thanks!

Answer & Explanation Solved by verified expert
3.9 Ratings (450 Votes)
Answer to the firstquestionAs per Capital Asset Pricing Model CAPMRe Rf RmRf Where Re Expected ReturnRf Risk free rate of returnRm Market ReturnRm Rf Market Risk Premium Beta of the stockCalculation of Expected Return of stockRf 158Rm Rf 824Re 1800Using the formula Re Rf RmRf    See Answer
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A stock has an expected return of 18.00%. The risk-free rate is1.58% and the market risk premium is 8.24%. What is the ? of thestock?Answer format: Number: Round to: 2 decimalplaces.The risk-free rate is 1.64% and the market risk premium is6.38%. A stock with a ? of 1.65 just paid a dividend of $1.29. Thedividend is expected to grow at 21.18% for three years and thengrow at 3.15% forever. What is the value of the stock?Answer format: Currency: Round to: 2decimal places.Unsure if I'm doing the process right. Thanks!

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