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The common stock of Leaning Tower of Pita, Inc., a restaurant chain, will generate the following payoffs to investors next year: Probability Dividend Stock Price
The common stock of Leaning Tower of Pita, Inc., a restaurant chain, will generate the following payoffs to investors next year:
| Probability | Dividend | Stock Price | |||||
| Boom | 0.25 | $ | 9 | $ | 193 | ||
| Normal economy | 0.55 | 3 | 109 | ||||
| Recession | 0.2 | 0 | 0 | ||||
The company goes out of business if a recession hits. Calculate the expected rate of return and standard deviation of return to Leaning Tower of Pita share-holders. The stock is selling today for $99. (Round your answers to 2 decimal places.)
| Expected rate of return % | |
| Standard deviation % |
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