Expected dividend yield-expected capital gain

Assignment Help Financial Management

Reference no: EM131520327

The risk free rate is 2.3% and the market price of risk is 11.5%. A stock with a beta of 1.6 has an expected dividend yield of 6% and an expected capital gain of 13%. This stock's alpha is equal to ______ and the stock is ________.

-1.7%; overpriced

1.7%; underpriced

-7.25%; underpriced

+7.25%; overpriced

Reference no: EM131520327

Questions Cloud

What is the resulting portfolio beta : Stock A has a beta of 0.9, Stock B has a beta of 1.05 and Stock C has a beta of 1.25. What is the resulting portfolio beta?

Suppose cash flows and their times of payment are certain : Suppose the cash flows and their times of payment are certain, and the risk-free interest rate is 10%.

The risk free rate that satisfies these conditions : What must be the risk free rate that satisfies these conditions

Uses effective-interest amortization method : On January 1, 2016, Tonika Company issued a seven-year, $10,000, 6% bond. Tonika uses the effective-interest amortization method.

Expected dividend yield-expected capital gain : A stock with a beta of 1.6 has an expected dividend yield of 6% and an expected capital gain of 13%.

Identify predominant industry in which your company operates : What conclusions can you draw regarding your company's performance? Identify the predominant industry in which your company operates.

Estimated intrinsic value per share of common stock : what is Praxis Corp.'s estimated intrinsic value per share of common stock?

What is the value of UOLs stock today based on information : What is the value of UOL’s stock today based on this information if the required return is 16%?

What is the standard deviation of this stocks returns : What is the standard deviation of this stock’s returns?

User Account

All Pages