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What is the required rate of return of a stock (PQ), given the inputs: beta=0.8, market return= 8%, risk-free rate= 3% (use CAPM)? What is
- What is the required rate of return of a stock (PQ), given the inputs: beta=0.8, market return= 8%, risk-free rate= 3% (use CAPM)?
- What is the intrinsic value of PQ, if it pays $3 in this year dividends (D0) and has a constant growth of 3%?
- If PQ is currently traded for $50, would you long or short the stock?
- If PQ maintains the same performance (D0=$3 and constant growth of 3%) while the market return drops to 7% and the risk-free rate increases to 4%, then what is the new intrinsic value of PQ?
- Given the new market conditions, would you long or short the stock if PQ is traded for $100?
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Computational Finance And Its Applications
Authors: C. A. Brebbia, M. Costantino
1st Edition
1853127094, 978-1853127090
