Question
III. The following stock quotation for McDonald reported on Friday, May 8, 2020 when market closed at 4:00 PM Eastern time McDonald's Corp. (MCD) -NYSE
III. The following stock quotation for McDonald reported on Friday, May 8, 2020 when
market closed at 4:00 PM Eastern time
McDonald's Corp. (MCD) -NYSE
182.66 -4.90 (-2.61%) At close: May 8 4:00PM EDT
Previous Close | 187.56 | Market Cap | 135.81B |
Open | 184.00 | Beta (5Y Monthly) | 0.60 |
Bid | 182.45 x 800 | PE Ratio (TTM) | 23.91 |
Ask | 182.85 x 1000 | EPS (TTM) | 7.64 |
Day's Range | 182.15 - 185.54 | Earnings Date | Jul 28, 2020 |
52 Week Range | 124.23 - 221.93 | Forward Dividend & Yield | 5.00 (2.74%) |
Volume | 3,764,754 | Ex-Dividend Date | Feb 28, 2020 |
Avg. Volume | 5,705,392 | 1y Target Est | 202.93 |
|
- What was May 8th close price of McDonald stock? How did it change from previous day (May 7th )?
- If you purchased McDonald stock at the 52 weeks low and sold it at close price on May 8, 2020. You have received dividend during this holding period. Calculate your holding period rate of return
- Show how the 2.74% yield is calculated.
- Currently, the 3-month T-bill interest rate is 0.5%, and required return for the stock market is 12%. Calculate required rate of return for McDonald stock using the CAPM model.
- Assume the dividend growth rate is 5%, calculate the true value and annual rate of
return of McDonald stock using Gordon model.
- Draw a security market line (SML) using the data above. Determine the intercept
and slope of the SML
- According to the CAPM model, will you buy McDonald stock or not? Why? (36 points)
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