What is the firm expected rate of return

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Reference no: EM131985960

1) Whited Inc.'s stock is currently sells for $32.25 per share. The dividend is projected to increase at a constant rate of 8.75% per year. The required rate of return on the stock, rs, is 11.50%. What is the stock's expected price 5 years from now?

A) $50.40

B) $54.69

C) $52.01

D) $46.65

E) $53.62

2) Joe is an average investor. His financial advisor gave him options of investing in stock A, with a standard deviation of 12%, and stock B, with a standard deviation of 9%. Both stocks have te same expected return of 16%. Joe can pick only one stock and decides to invest in stock B

A) This was not a good financial decision

B) This was a good financial decision

C) Statements a and b are correct

D) None of the above

3) Blume Co.'s stock has a 26% chance of producing a 32% return, a 47% chance of producing a 10% return, and a 27% chance of producing a -19% return. What is the firm's expected rate of return?

A) 6.61%

B) 7.44%

C) 7.01%

D) 7.89%

E) 8.39%

4) A financial planner is examining the portfolios held by several of her clients, Identify which of the following portfolios is likely to have the smallest standard deviation:

A) a portfolio consisting of about thirty randomly selected stocks form different sectors

B) A portfolio containing Microsoft, Apple, and Google Stock

C) a portfolio containing only Microsoft stock.

D) A portfolio containing only bitcoin

Reference no: EM131985960

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