5 18. Union Paper's stock is currently in equilibrium selling at $60 per share. The firm has been experiencing a 5 percent annual growth rate. Earnings per share (Eo) were $8.00 and the dividend payout ratio is 40%. The risk-free rate is 5 percent and the market risk premium is 6 percent. If systematic risk increases by 50 % , all other factors remaining constant, the stock price will increase/decrease by: -$33.33 -$26.67 -$14.11 -$30.00 -$20.00 d. a. b. . . You are given the following data: The risk-free rate is 2.0 percent. The required return on the market is 8 percent. The expected growth rate for the firm is 4 percent. The last dividend paid was $5.00 per share. Beta is 1.5 1. 2. 3. 4. 5. At what price should the stock sell? $44.57 $71.43 $59.43 19. $130.00 $ 74.29 d. a. . b. . Now assume the following changes are made: The inflation premium increases by the amount of 0.50 percent. An increased degree of risk aversion causes the required return on the market to go to 9 percent after adjusting for the changed inflation premium. The expected growth rate increases to 5 percent. Beta rises to 1.6. 1 2. 3. 4. What will be the change in price per share assuming the stock was in equilibrium 20. before the changes? -$10.65 -$14.07 -$ 7.83 -$ 4.70 d. a. -$ 6.26 b. e