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A share of stock is now selling for $150. It will pay a dividend of $5 per share at the end of the year. Its
A share of stock is now selling for $150. It will pay a dividend of $5 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 4% and the expected rate of return on the market is 19%. (Round your answer to 2 decimal places.) Expected selling price I am buying a firm with an expected perpetual cash flow of $1,450 but am unsure of its risk. If I think the beta of the firm is zero, when the beta is really 1, how much more will I offer for the firm than it is truly worth? Assume the risk-free rate is 5% and the expected rate of return on the market is 20%. (Input the amount as a positive value.) Present value difference Assume both portfolios A and B are well diversified, that E( ra)-132% and E(rg,-14.396. If the economy has only one factor, and round intermediate calculations. Round your answer to 1 decimal place.) -1 while a 12 what must be the ris free rate? Do not Risk-free rate References eBook&Resources
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