* Outlook .ll @ 94% 0 11:09 AM Ch07 Ch06 Redemption 5 a @ ... fx A B C D E 6A. Given arre of 3%, RP of 7% calculate the market rate (rm)? Also, calculate r, when the beta is 1.3? I'm = 6B. Given a Pre of 4%, market rate (ru) of 12%, and beta of 0.9, calculaters? 12 13 6C. Calculate the expected return and standard deviation with the possible outcomes below: Probability Return Poor 0.2 -6% Average 0.4 5% Good 0.4 10% 14 Expected Return 16 17 18 Standard Deviation 6D. You own $3,000,000 in investment X, which has a beta of 1.3. You use $300,000 of that investment to purchase investment Z, which has a beta of 0.7. What is the new portfolio beta? bp = 7A. Assume supernormal growth is to last for 4 years. How would this affect its price, dividend yield, and capital gains yield? Part 1. Find the price today. $2.00 12.0% 20% 8% Short-run g; for Years 1-4 only. Long-run g; for Year 5 and all following years. 20% 20% 8% Year Dividend PV of dividends = D. Horizon value = P = =r, - SL Part 2. Finding the expected dividend yield. Dividend vield = D. I Redemption