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An analyst gathered the following information for a stock and market parameters: stock beta = 0.976 ; expected return on the Market = 9.19% ;

An analyst gathered the following information for a stock and market parameters: stock beta = 0.976 ; expected return on the Market = 9.19% ; expected return on T-bills = 2.28% ; current stock Price = $6.19 ; expected stock price in one year = $13.03 ; expected dividend payment next year = $1.99 . Calculate the required return and expected return for this stock. Please write your answers as percentages (e.g. .1234 should be written as 12.34):

  1. Required Return: %
  2. Expected Return: %

The market risk premium for next period is 9.02% and the risk-free rate is 2.74% . Stock Z has a beta of 1.013 and an expected return of 14.06%. Compute the following. After completing all calculations, please round your answers to four decimal places.

  1. Market's reward-to-risk ratio:
  2. Stock Z's reward-to-risk ratio:

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