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1 . Expected Return A company's current stock price is $ 8 5 . 3 0 and it is likely to pay a $ 4

1. Expected Return A company's current stock price is $85.30 and it is likely to pay a $4.30 dividend next year. Since analysts estimate the company will have a 10% growth rate, what is its expected return?
Multiple Choice
5.04%
10.00%
15.04%
4.73%
2. Risk Premium If the annual return on the S&P 500 Index was 10.30 percent. The annual T-bill yield during the same period was 4.45 percent. What was the market risk premium during that year?
Multiple Choice
14.75%
10.30%
4.45%
5.85%
3. Stock Market Bubble The NASDAQ stock market bubble peaked at 3,800, and two and a half years later it had fallen to 2,250. What would be the percentage decline?
Multiple Choice
-40.79%
-16.89%
-68.89%
-59.21%
4. Portfolio Beta You own $19,000 of City Steel stock that has a beta of 3.29. You also own $37,000 of Rent-N-Company (beta =1.74) and $20,400 of Lincoln Corporation (beta =-0.86). What is the beta of your portfolio?
Multiple Choice
1.43
1.00
4.17
4.92
5. Expected Return A company's current stock price is $25.60 and it is likely to pay a $1.35 dividend next year. Since analysts estimate the company will have a 14% growth rate, what is its expected return?
Multiple Choice
14.00%
1.54%
5.27%
19.27%

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