The expected dividend is $2.50 for a share of stock priced at $25. What is the cost of equity if the long-term growth in dividends is projected to be 8|%? a. 10.0% b. 8.0% c. 25.0% d. 18.0% You place half your wealth into TiVo stock and the other half into Intel bonds. TiVo stock's beta = 1.2 and Intel bonds' beta is 0.90. Calculate the portfolio beta. a. 0.90 b. 1.00 c. 1.05 d. 1.10 e. 1.20 Consider one of the two equations that can be used to calculate a firm's cost of equity: r_E = Div_1/P_0 + g. If the expected growth rate of American Airlines' (AAL) common-stock dividends increases and if the price of AAL's stock also increases, what happens to AAL's cost of equity? It _____. a. increases b. decreases c. remains unaffected d. might go up or down, depending on the relatives sizes of the two changes Which of the following has a beta of zero? a. a risk-free asset b. the market c. every asset has a beta greater than zero d. none of the above