Question
GOOG has beta of 1.1, NFLX has a beta of 1.3, and AVGO has beta of 0.9. The market risk premium is 8% and the
GOOG has beta of 1.1, NFLX has a beta of 1.3, and AVGO has beta of 0.9. The market risk premium is 8% and the risk free rate is 3%. You estimated that GOOG's stock price will growth to $1610 a share next year, from the current level of $1480., NFLX stock price will be $520 next year, where it is $480 currently, and AVGO stock will be at $330 a share next year, where it is $285 today.GOOG and NFLX will pay no dividend and AVGO will pay $14 in dividend next year. Should you buy/short either of these stocks?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To determine whether you should buyshort any of these stocks we need to calculate the expected returns and compare them to the required rate of return ...
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
8th Edition
1285190904, 978-1305176348, 1305176340, 978-1285190907
