Expected return on market portfolio

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Reference no: EM13927661

Stock XYZ: earning at time 0 E0 = $2.50, b = 40%, ROE = 13%, risk-free rate is 3%, expected return on market portfolio is 9%, the beta of stock XYZ is 1.5, and CAPM is valid. (1) What’s the required rate of return k based on CAPM? (2) What’s D1 of stock XYZ? (3) What’s stock XYZ’s P/E ratio? (4) What’s PVGO?

Reference no: EM13927661

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