Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company's shares are expected to pay a dividend of $2.37 per share in one year. The dividend is expected to grow at a real

image text in transcribedimage text in transcribed

A company's shares are expected to pay a dividend of $2.37 per share in one year. The dividend is expected to grow at a real rate of 1.5% per year indefinitely. The required real rate of return on the company's shares is 7% per year. Calculate the stock price (to the nearest cent). Your answer should be to the nearest cent and you should not include a dollar sign or commas. If your answer is $12.187, you should enter your answer as 12. 19. If your answer is $12.183, you should enter your answer as 12.18. Answer: You plan to invest 32% of your portfolio in Company A with the remainder to be invested in Company B. The standard deviation of Company A's stock returns is 17%. The standard deviation of Company B's stock returns is 24%. The correlation between the stock returns of Company A and Company B is 0.55. What is the standard deviation of your portfolio's returns (as a percentage to two decimal places)? Your answer should be expressed as a percentage to 2 decimal places but do not include a percent sign. For example, if your answer is 10.237%, you should enter 10.24. If your answer is 10.233%, you should enter 10.23. Please do not enter your answer as a decimal, such as 0.1024

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mission Ready Finances Proven Principles To Guide Your Story To Financial Freedom

Authors: Marco Parzych

1st Edition

173321531X, 978-1733215312

More Books

Students also viewed these Finance questions