The risk-free rate of return is \8, the expected rate of return on the market...
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The risk-free rate of return is \8, the expected rate of return on the market portfolio Is \15, and the stock of Xyrong Corporation has a beta coefficlent of 1.2 . Xyrong pays out \40 of Its earnings In dividends, and the latest earnings announced were \\( \\$ 10 \\) per share. Dividends were just pald and are expected to be paid annually. You expect that Xyrong will earn an ROE of \20 per year on all relnvested earnings forever. Required: a. What is the Intrinsic value of a share of Xyrong stock? (Do not round Intermedlate calculations. Round your answer to 2 decimal places.) b-1. If the market price of a share Is currently \\( \\$ 100 \\), and you expect the market price to be equal to the intrinsic value one year from now, calculate the price of the share after one year from now. (Do not round Intermedlate calculations. Round your answer to 2 decimal places.) b-2. What is your expected one-year holding-perlod return on Xyrong stock? (Do not round Intermedlate calculatlons. Round your answer to 2 decimal places.)
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The risk-free rate of return is \8, the expected rate of return on the market portfolio Is \15, and the stock of Xyrong Corporation has a beta coefficlent of 1.2 . Xyrong pays out \40 of Its earnings In dividends, and the latest earnings announced were \\( \\$ 10 \\) per share. Dividends were just pald and are expected to be paid annually. You expect that Xyrong will earn an ROE of \20 per year on all relnvested earnings forever. Required: a. What is the Intrinsic value of a share of Xyrong stock? (Do not round Intermedlate calculations. Round your answer to 2 decimal places.) b-1. If the market price of a share Is currently \\( \\$ 100 \\), and you expect the market price to be equal to the intrinsic value one year from now, calculate the price of the share after one year from now. (Do not round Intermedlate calculations. Round your answer to 2 decimal places.) b-2. What is your expected one-year holding-perlod return on Xyrong stock? (Do not round Intermedlate calculatlons. Round your answer to 2 decimal places.) 