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please big big helps I would appreciate for an examn those 2 (15 pts) 4. Suppose that you are considering the purchase of a 20-year
please big big helps I would appreciate for an examn those 2
(15 pts) 4. Suppose that you are considering the purchase of a 20-year Treasury bond, a 20-year Walmart Inc. corporate bond, and the common stock of Walmart. The current risk premiums are provided: 3.00% 2.00% Maturity risk premium Default risk premium Real risk free rate Seniority risk premium Inflation premium Liquidity premium 2.00% 5.00% 2.00% 1.00% Required: Determine the required rate of return for each security based on the information provided above. (12 pts) 5. You are considering the purchase of the common stock of Walmart Inc. (WMT). Given the following information, explain whether or not if you would buy the stock. Support your conclusions with computations. The current market price of WMT is $144 per share. The target estimated price in two years is $180 per share. The dividend per share in one year is $2.25 and $2.40 in two years. The beta for WMT is .33. The risk free rate is 2.0%. The market risk premium is 6.0%. (15 pts) 4. Suppose that you are considering the purchase of a 20-year Treasury bond, a 20-year Walmart Inc. corporate bond, and the common stock of Walmart. The current risk premiums are provided: 3.00% 2.00% Maturity risk premium Default risk premium Real risk free rate Seniority risk premium Inflation premium Liquidity premium 2.00% 5.00% 2.00% 1.00% Required: Determine the required rate of return for each security based on the information provided above. (12 pts) 5. You are considering the purchase of the common stock of Walmart Inc. (WMT). Given the following information, explain whether or not if you would buy the stock. Support your conclusions with computations. The current market price of WMT is $144 per share. The target estimated price in two years is $180 per share. The dividend per share in one year is $2.25 and $2.40 in two years. The beta for WMT is .33. The risk free rate is 2.0%. The market risk premium is 6.0% Step by Step Solution
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