Sorbond Industries has a beta of 1.45. The risk free rate is 8% and the expected return on the market portfolio is 13 percent. The company currently pays a dividend of $2 per share, and investors expect it to experience a growth in dividends of 10 per annum forever. <\/p>
a. What is the stocks required rate of return according to the CAPM? b. What is the stocks present market price per share, assuming this required return? <\/p>", "transcribed_text": "", "related_book": { "title": null, "isbn": null, "edition": null, "authors": null, "cover_image": null, "uri": null, "see_more_uri": "" }, "free_related_book": { "isbn": "", "uri": "", "name": "", "edition": "" }, "question_posted": "2024-09-12 07:03:37", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/business-communication\/have-you-used-the-facts-in-a-reasonable-manner-to-2000073", "description": "Have you used the facts in a reasonable manner to arrive at your conclusions and recommendations? Would your audience agree with your reasoning?", "stars": 0 }, { "url": "\/at-the-end-of-the-weekly-payroll-period-on-june", "description": "At the end of the weekly payroll period on June 30, 2016, the payroll register of Cordts Consultants showed employee earnings of $71,900. Determine the firm's payroll taxes for the period. Use a...", "stars": 3 }, { "url": "\/study-help\/questions\/sorbond-industries-has-a-beta-of-145-the-risk-free-10417432", "description": "Sorbond Industries has a beta of 1.45. The risk free rate is 8% and the expected return on the market portfolio is 13 percent. The company currently pays a dividend of $2 per share, and investors...", "stars": 3 }, { "url": "\/study-help\/questions\/you-are-evaluating-a-project-that-involves-an-initial-outlay-581682", "description": "You are evaluating a project that involves an initial outlay of $70,000 to commit to the project. If you take the project, then you will have inflows of $60,000 in Yr I, $85,000 in Yr 2, -$12,000 in...", "stars": 3 }, { "url": "\/study-help\/questions\/3-for-this-question-you-will-be-given-a-1008379", "description": "3) For this question - you will be given a specific Country by your Professor. Explain how the brand might choose to focus more on certain CSR components based on the Country to maximize business...", "stars": 3 }, { "url": "\/study-help\/questions\/which-examples-demonstrate-correct-abbreviations-used-in-titles-organizations-locations-3235200", "description": "Which examples demonstrate correct abbreviations used in titles, organizations, locations, time, and measurement? Instruction: Choose all options that best answer the question. Answer Choices I saw...", "stars": 3 }, { "url": "\/study-help\/questions\/a-newly-formed-task-force-to-determine-how-many-nurses-3385985", "description": "A newly formed task force to determine how many nurses are needed on each shift meets each week. The task force performance depends on the sum of individual performance, known as [ Select ] ....", "stars": 3 }, { "url": "\/study-help\/questions\/consider-a-game-in-which-two-students-simultaneously-choose-effort-3627552", "description": "Consider a game in which two students simultaneously choose effort levels span style=\"font-family: CambriaMath;font-size:8pt;color:rgb(0,0,0);font-style:normal;font-variant:normal;\">, span...", "stars": 3 }, { "url": "\/study-help\/questions\/you-own-a-fast-food-business-that-only-serves-burgers-3542114", "description": "You own a fast food business that only serves burgers, fries, and soft drinks. Part 1: Create a process flow chart for the order process from the time the customer approaches the counter to the time...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/if-you-invest-15000-today-at-an-interest-rate-of-10417431", "next": "\/study-help\/questions\/what-would-happen-if-the-books-were-never-closed-10417433" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Sorbond Industries has a beta of 1.45. The risk free rate is", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/sorbond-industries-has-a-beta-of-145-the-risk-free-10417432" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }": "1" } }