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Find what is the price of the stock today

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Question 1) A stock's returns have a correlation coefficient with the overall market of 40%. Its standard deviation is 30%. The market index has a standard deviation of 15%. Calculate the stock's beta coefficient.

Question 2) Using the equation for the Security Market Line, calculate the required return for a stock where the risk-free rate is 3%, the required return on the market is 8% (so the market risk premium is 5%), and the beta is 1.20.

Question 3) A company just paid an annual dividend of $1.00. Growth in dividends is expected to be constant at 4% indefinitely. The required return on the stock is 8%.

Using the dividend discount model, what is the price of the stock today?

Question 4) A company will pay an annual dividend of $2.00 next year. Growth in dividends is expected to be constant at 4% indefinitely. The stock is currently priced at $50.00. What is the required return?

Reference no: EM132590073

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