What is the expected return on a stock

Reference no: EM132029856

Question: Part a: XYZ common stock is expected to pay a dividend of $1.05 next year, and that dividend grows at a constant rate of 9.5 percent. If the current price of XYZ common stock is $78.41, then what is the expected rate of return for this stock, based on the Discounted Cash Flow model? (Show your answer in DECIMAL FORM to three decimals, e.g., 12.3% would be entered as 0.123).

Part B: The total expected return on the entire stock market is 8 percent and U.S. Treasuries are yielding 3.2 percent. What is the expected return on a stock with a beta of 2.5? (show your answer in decimal form to four places, i.e., 12.34% would be entered as 0.1234)

Reference no: EM132029856

Questions Cloud

What is the present value of these receipts : What is the present value of these receipts?

What is the magnitude of the coin displacement : If the clock starts when the coin begins to fall, what is the magnitude of the coin's displacement between t1 = 0.384 s and t2 = 0.576 s?

Discuss about a physical security policy : Our dependence on computers has resulted in massive amounts of sensitive, and valuable information being physically and digitally stored.

Compute the profit with the current equipment : Compute the profit with the current equipment and the expected profit with the new equipment.

What is the expected return on a stock : The total expected return on the entire stock market is 8 percent and U.S. Treasuries are yielding 3.2 percent. What is the expected return on a stock.

What is the field of crime prevention : Write two pages using proper APA format describing what is the field of Crime Prevention Through Environmental Design.

What is the ratio of the inductance of solenoid a : What is the ratio of the inductance of solenoid A to that of solenoid B? (a) 4 (b) 2 (c) 1 (d) 12 (e) 14

Magnitude of the average emf induced in the loop : What is the magnitude of the average emf induced in the loop? (a) 0.20 V (b) 0.025 V (c) 5.0 mV (d) 1.0 mV (e) 0.20 mV

How much sales revenue does the company need to breakeven : Assume that the Variable Cost of Goods Sold is 50% of Sales, How much sales revenue does the company need to breakeven

User Account

All Pages