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1- A stock just paid an annual dividend of $2. The dividends are expected to grow at 20% per year over each of the next
1- A stock just paid an annual dividend of $2. The dividends are expected to grow at 20% per year over each of the next three years and 5% per year thereafter. What is the value ofthe stock if the required rate of return is 12%? Solution?
2- What is the required rate of return on a stock if the risk-free rate is 7%, the return on the market portfolio is 15%, and the beta is 1.5? solution?
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