1. You consider buying a share of stock at a price of $25. The stock is expected to pay a dividend of $1.50 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $30. The stock's beta is 1.1, rf is 6%, and market risk premium is 10%. What is the stock's alpha?
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- You are considering buying a share of stock at a price of $73. The stock is expected to pay a dividend of $4.75 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $79. The stock's beta is 1.5, r, is 4%, and E[m] = 12%. What is the stock's alpha (abnormal return)? O 2.33% -2.33% O 1.27% O 1.00% O-1.27% ▷You are thinking of buying a stock priced at $98 per share. Assume that the risk-free rate is about 4.7% and the market risk premium is 5.5%. If you think the stock will rise to $122 per share by the end of the year, at which time it will pay a $1.74 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is (Round to two decimal places.)You are thinking of buying a stock priced at $100 per share. Assume that the risk-free rate is about 4.5% and the market risk premium is 6%. If you think the stock will rise to $117 per share by the end of the year, at which time it will pay a $1 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?
- ← You are thinking of buying a stock priced at $109.31 per share. Assume that the risk-free rate is about 4.03% and the market risk premium is 6.48%. If you think the stock will rise to $118.76 per share by the end of the year, at which time it will pay a $3.48 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is (Round to two decimal places.) ...A stock is currently selling for $18 with a beta of 1.6. They are expected to pay a dividend of $0.50 next year. If the risk-free rate is 2% and the market risk premium is 6%, what price will the stock have to reach next year to meet your required return?1. A stock is currently selling for $92.45 and is expected to sell for $109.07 in 1 year. If the company pays a dividend of $2.98 what is the stock's HPR? 2. A stock has a beta of 1.14. The risk-free rate is 1.809% and the market risk premium is 5%. What is the fair return on the stock?
- You consider buying a share of stock at a price of $950. The stock is expected to pay a dividend of $10 next year, and your advisory service tells you that you can expect to sell the stock in 1 year only for $945. What is the expected rate of return?The next expected dividend for Stock P is 10 and the current price of the stock is P40. The risk free rate is 5%, the market risk premium is 8%, and the stock's beta is 1. What is the expected rate of return? What is the required rate of return? Why should an investor buy this stock?Your broker has recommended that you purchase stock in ZZZ-Best, Inc. She estimates that the 1-year target price is $70, and ZZZ-Best consistently pays an annual dividend of $8. Based on your analysis, you estimate that the stock has a required rate of 18%. What is the intrinsic value of this stock? O $64.43 O $68.73 O $67.35 O $61.86 O $66.10
- Suppose the current price of a stock is $50 per share. You expected to earn a 10% return on the stock if you buy it at the current market price and hold it for one year (right after you receive the dividend for the year). The stock is expected to pay a dividend of $2.5 per share, what do you expect the stock price to be one year from now? • Suppose the current price of a stock is $50 per share. You expected to earn a 10% return on the stock if you buy it at the current market price and hold it for one year (right after you receive the dividend for the year). The stock one year from now is expected to be $53, how much dividend do you expect to receive during the year .A share of stock with a beta of 0.78 now sells for $58. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 5%, and the market risk premium is 8%. a. Suppose investors believe the stock will sell for $60 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? b. At what price will the stock reach an "equilibrium" at which it is perceived as fairly priced today? Complete this question by entering your answers in the tabs below. Required A Required B Suppose investors believe the stock will sell for $60 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? Note: Do not round intermediate calculations. Round your opportunity cost of capital calculation as a percentage rounded to 2 decimal places. Opportunity cost of capital The stock is a bad buy and the investors will t invest %Consider a stock that wil have price of $31 54 one year from now and pay a dividend of $3.28 in one year. The expected rate of returm is 3.5%. What is the current price of the stock? Enter your response below rounded to 2 DECIMAL PLACES. Number
