please show work

return of 10% and a beta of 1.75 while Portfolio Y has an expected return of 8% and a beta of 0.95 6. You are considering investing in one of two well-diversified portfolios Portfolio X has an expected Assuming that you are a rational risk-averse investor and the risk-free rate is 2.50 percent, (a) based the reward and the risk, which of the two portfolios Should you choose and why? solely on the reward, which of the two portfolios should you choose and why, and (b) considering both CHAPTER 7: STOCKS or EQUITIES 1. A stock is expected to pay the following dividends per share over the next three years, respectively: $1.50, $1.95 and $2.20. If you expect to be able to sell the stock for $54.26 in three years and your required rate of return is 8%, what is the most that you should be willing to pay for a share of this stock today? 2. (a) If Jones Company's preferred stock currently sells for $45.60. If your required rate of return is 6%, what is the minimum annual dividend that you would require in order to purchase Jones' preferred stock? (b) If the stock is selling for $25.30 and the annual dividend is $1.25, what would be the annual return on the stock? (c) If the annual dividend on this stock were $2.00 per share and the minimum rate of return you wanted to earn were 5%, what is the most that you would be willing to pay for a share of this stock? 3. Temple Lunch Trucks, Inc. just paid a dividend of $3.50. Dividends are expected to grow at a rate of 3% per year from here on out. If the required rate of return on this stock is 10%, what is the most that you should be willing to pay for a share of this stock today? 4. Temple Lunch Trucks, Inc. just paid a dividend of $3.50. Dividends are expected to grow at a rate of 4% per year from here on out. If the risk-free rate is 2.5%, the expected return on the market is 5% and Temple Lunch Trucks' stock has twice the average market risk, what is the most that you should be willing to pay for a share of this stock today? 5. If Temple Lunch Trucks' dividend in #3 above was expected to grow at a constant annual rate of 4% instead of 3%, what is the most that you should be willing to pay for a share of this stock today? What can you conclude about the relationship between expected dividend growth and a stock's price? 6. A firm will begin paying a constant annual dividend of $1.50 a share beginning five years from now. If you require a rate of return of 7%, what is the most that you would be willing to pay for a share of this tock TODAY? A firm's stock price dropped to $25 overnight. Given its dividend growth rate of 4% and the last nnual dividend of $1.05, what is the implied required rate of return necessary to justify the new lower arket price of $25