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11-What is the required rate of return (Rs) of a stock (WC) given the following inputs: beta (B)=0.8, market return (RM)=8%, risk-free rate (RRF)= 3%?
11-What is the required rate of return (Rs) of a stock (WC) given the following inputs: beta (B)=0.8, market return (RM)=8%, risk-free rate (RRF)= 3%? a. 4% b. 7% c. 11% d. None of the above 12-If WQ pays $3 in dividends (D.) and has a constant growth of 3%, then what is WQ's intrinsic value? a. $43.75 b. $66.75 c. $77.25 d. None of the above 13-If WQ is currently traded for $50, would you long or short the stock? a. Long b. Short c. None since there is no investment opportunity at $50 market price 14-If WQ maintains the same performance (Do=$3 and constant growth of 3%) while the market return drops to 7% and the risk-free rate increases to 4%, then what is the new intrinsic value of WQ? a. $80.24 b. $90.88 c. $102.12 d. None of the above 15-Given the new market conditions (Question#14), would you long or short the stock if WQ is traded for $100? a. Long b. Short c. None since there is no investment opportunity at $100 market price
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