Portfolio beta and required return

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1. Problem- Portfolio Beta

You have a portfolio with a beta of 1.30. What will be the new portfolio beta if you keep 84 percent of your money in the old portfolio and 16 percent in a stock with a beta of 1.07? (Do not round intermediate calculation and round your answer to 2 decimal places.)

New portfolio beta =

2. Problem- Required Return

Paccar’s current stock price is $83.25 and it is likely to pay a $3.07 dividend next year. Since analysts estimate Paccar will have an 14.2 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)

Required return =

Reference no: EM131886404

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