Clay Gentry has $100,000 invested in a 2-stock portfolio. $32,500 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta?Do not round your intermediate calculations.Round the final answer to 2 decimal places.

a. 1.06

b. 0.72

c. 0.77

d. 1.25

e. 0.96

2.5 points

Question 11

1. Calculate the required rate of return for Clorox Inc., assuming that (1) investors expect a 4.0% rate of inflation in the future, (2) the real risk-free rate is 3.0%, (3) the market risk premium is 5.0%, (4) the firm has a beta of 2.50, and (5) its realized rate of return has averaged 15.0% over the last 5 years.Do not round your intermediate calculations.
2. a. 15.80%
3. b. 20.09%
4. c. 19.50%
5. d. 16.77%
6. e. 21.65%

2.5 points

Question 12

1. Chung Inc. is considering a capital budgeting project that has an expected return of 23% and a standard deviation of 30%. What is the project's coefficient of variation?Do not round your intermediate calculations.Round the final answer to 2 decimal places.
2. a. 1.30
3. b. 1.33
4. c. 1.41
5. d. 1.00
6. e. 1.60

2.5 points

Question 13

1. Cooney Company's stock has a beta of 0.60, the risk-free rate is 2.25%, and the market risk premium is 5.50%. What is the firm's required rate of return?Do not round your intermediate calculations.
2. a. 6.60%
3. b. 5.55%
4. c. 6.16%
5. d. 4.66%
6. e. 4.38%

2.5 points

Question 14

1. Dalton Inc.'s stock has a 25% chance of producing a 36% return, a 50% chance of producing a 12% return, and a 25% chance of producing a -18% return. What is the firm's expected rate of return?Do not round your intermediate calculations.
2. a. 10.50%
3. b. 10.40%
4. c. 11.76%
5. d. 9.14%
6. e. 9.35%

2.5 points

Question 15

1. Alex Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D ₁ = $1.25). The stock sells for $22.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?
2. a. 4.25%
3. b. 5.88%
4. c. 4.30%
5. d. 4.94%
6. e. 4.90%

2.5 points

Question 16

1. If D ₀ = $1.75, g (which is constant) = 3.6%, and P ₀ = $34.00, then what is the stock's expected total return for the coming year?
2. a. 6.97%
3. b. 8.58%
4. c. 9.20%
5. d. 7.41%
6. e. 8.93%

2.5 points

Question 17

1. If D ₀ = $2.25, g (which is constant) = 3.5%, and P ₀ = $52, then what is the stock's expected dividend yield for the coming year?
2. a. 4.61%
3. b. 3.36%
4. c. 3.81%
5. d. 4.48%
6. e. 4.25%

2.5 points

Question 18

1. If D ₁ = $1.25, g (which is constant) = 4.7%, and P ₀ = $30.00, then what is the stock's expected dividend yield for the coming year?
2. a. 4.13%
3. b. 4.17%
4. c. 3.25%
5. d. 3.38%
6. e. 3.17%

2.5 points

Question 19

1. If D ₁ = $1.25, g (which is constant) = 5.5%, and P ₀ = $36, then what is the stock's expected total return for the coming year?
2. a. 7.54%
3. b. 7.00%
4. c. 8.88%
5. d. 8.97%
6. e. 7.99%

2.5 points

Question 20

1. If D ₁ = $1.50, g (which is constant) = 2.5%, and P ₀ = $56, then what is the stock's expected capital gains yield for the coming year?
2. a. 2.83%
3. b. 2.98%
4. c. 3.08%
5. d. 1.95%
6. e. 2.50%