Answered step by step
Verified Expert Solution
Question
1 Approved Answer
i need a detailed, step by step answer for both problem 1 and 2.. pleaase SECTION (1) Problem Solving (60 marks] Problem 1 (12 marks)
i need a detailed, step by step answer for both problem 1 and 2.. pleaase SECTION (1) Problem Solving (60 marks] Problem 1 (12 marks) Consider the following two potential investments Nexit and Rexit. You plan to invest 8,000 KD in investment Nexit and 12,000 KD in investment Rexit. Date Return Nexit Return Rexit 2016 0.03 -0.04 2017 -0.05 0.08 2018 0.08 0.07 2019 0.12 0.13 a. Build a portfolio consisting of Nexit and Rexit based on the information above. b. Calculate the average return of the portfolio. C. Calculate the risk of the portfolio. Problem 2 (12 marks) SAGE Enterprises just paid a dividend of $2 per share. The current market price is $50 per share. Dividends are expected to grow at a constant rate "g". The risk-free rate is equal to 3% and the share risk premium is equal to 5%. a. Calculate the growth rate of dividends "g". b. Estimate the price of the share 5 years from today
i need a detailed, step by step answer for both problem 1 and 2.. pleaase
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started