What are the expected returns on stock j and stock k

Reference no: EM13290572

The following information is available in general and about investments in stocks J and K.

The market return (kM) = 9%
The risk free rate (kRF) = 5%
Stock J's beta = 0.8
Expected constant growth rate for Stock J = 6%
Investment in Stock J = $80,000
Stock K's beta = 1.4
Expected constant growth rate for Stock K = 7%
Investment in Stock K = $120,000

a. What are the expected returns on Stock J and Stock K individually?
b. What is the expected return on the portfolio?
c. If Stock K just paid a dividend of $2.50, what is Stock K's intrinsic value?

Reference no: EM13290572

Questions Cloud

Depict the structure of p-aminobenzoic : draw the structure of p-aminobenzoic, and show all importnant resonance structures for this molecule

What are the projects net present value : If the firm's cost of capital is 12%, what are the project's net present value and internal rate of return?

What would the selection criteria and a pratical application : What would the selection criteria and a pratical application be for a unitary, a modular and a rack mounted programmable controller

What is the maximum current in the wire : Two 9.0 cm--diameter metal plates are 1.2 cm apart are charged to 12.5 nC . They are suddenly connected together by a 0.218mm, What is the maximum current in the wire

What are the expected returns on stock j and stock k : The following information is available in general and about investments in stocks J and K.

Explain what is the new molarity of the acid : When you initially standarized your NaOH sollution, you diluted your HCl stock solution and added water to it. If you used 24.8 ML of 0.18 M HCl stock solution and added another 26.2 mL of water, what is the new molarity of the acid

Determine what is the nominal resistance of the resistor : the color code on a resistor specifies the resistance as4.7kOhms. A multimeter measured the resistance as 4.688kOhms. What is the nominal resistance of the resistor

Estimate the area of each plate : The electric field between the plates of a paper-separated (K-375) capacitor is 8.20×10^4 V/m. estimate the area of each plate

Calculate the beta of the portfolio : If the return on the market is 10% and the risk-free rate is 3%, what is the required return on the portfolio?

User Account

All Pages