please, you either solve all or none.

Be sure to write the formulas used and substitute values. Show your work in detailed. Answers are 100% correct

7. A share is expected to pay a dividend of $4.00. If the dividend is expected to grow at an annual rate of 5% and the required return is 15%, what is the intrinsic value of the share?

8. For a firm with a very recently reported EPS of $2.20, you have estimated that earnings will grow by 8 percent and you have estimated the appropriate P-E (price to expected earnings) ratio to be 17. What should the value of this share be?

9. Given the following two stocks X and Y Stock Expected rate of return Beta X 12 0.8 Y 18 2.4 If the expected market rate of return is 13% and the risk-free rate is 5%, what are the alphas for each security, where alpha is defined as the difference between the actually expected and the fair rate of return on the stock? Which security would be considered a good buy based upon the equilibrium CAPM model?

10. You are considering acquiring SunBlocker Oil common stock that you would like to hold for one year. You expect to receive both $2.50 in dividends and $37 from the sale of the stock at the end of the year. You require a minimum rate of return of 15%. What is the maximum price you would pay for SunBlocker stock today?

Answers

7. $40 8. $40.39 9. X = 0.6%; Y = 6.2%; Buy X, consider shorting Y. 10. $34.35