Gesto, Inc., has an issue of preferred stock outstanding that pays a $4.70 dividend every year, in perpetuity.

Required:

If this issue currently sells for $79.95 per share, what is the required return?

The stock price of Jenkins Co. is $54.80. Investors require a 14 percent rate of return on similar stocks.

Required:

If the company plans to pay a dividend of $4.05 next year, what growth rate is expected for the companys stock price?

You own a portfolio that has $2,300 invested in Stock A and $3,400 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 percent, respectively.

Required:

What is the expected return on the portfolio?