The risk free rate is 7%, the return in the market is 10%, and the beta is 1.30. What return must you receive to be satisfied that you are being fairly compensated for the risk of the firm?

What should a zero coupon bond maturing for $1000 in 9 years with a 7% market rate sell for?

Page Two

Preferred stock has a dividend of $12 per year. The required return is 6%. What should be the price per share?

Hurricane Corporation expects to grow its dividend by 5% per year. The current dividend is $2 per share. The required return is 8%.

What is the estimated value of a share of common stock?

If price is $40 and dividends were $1.50 per share but expected to grow at 4% per year, what would be the required rate of return?