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1. 2. Wildhorse Corp. has 18 -year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent and a yield
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Wildhorse Corp. has 18 -year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 9.875 percent and a yield to maturity of 6.0 percent. Assume face value is $1,000. Problem 8.30(a) Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.) Current price $ You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below. Calculate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 15 percent and that the risk-free rate is 6 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75\%.) Beta of the portfolio Expected rate of return %Step by Step Solution
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