What would be the new expected rate of return for ge stock

Assignment Help Financial Management

Reference no: EM131859854

1. Under CAPM, General electric sock has an expected return of 13.3%, given its beta of 1.3 and a risk-free rate of 3.4%. If the market risk premium drops by 150 basis points, what would be the new expected rate of return for GE stock.

2. Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $11 per share dividend 10 years from today and will increase the dividend by 4 percent per year thereafter. If the required return on this stock is 12 percent, what is the current share price?

Reference no: EM131859854

Questions Cloud

What is the projected dividend for coming year : Dividends are expected to grow at 28 percent per year during the next three years, What is the projected dividend for the coming year?

Compare and contrast commercial paper and treasury bills : Compare and contrast commercial paper and Treasury bills. Which would typically offer a higher interest rate? Why?

What is the EAR on the loan : TTDS is offered a $750,000 loan for nine months at an APR of 8%. This loan has a loan origination fee of 2%. What is the EAR on the loan?

What is the after-tax cash flow from the sale of machinery : Your firm purchased machinery with a 7-year MACRS life for $10.30 million. what is the after-tax cash flow from the sale of the machinery?

What would be the new expected rate of return for ge stock : Under CAPM, General electric sock has an expected return of 13.3%, what would be the new expected rate of return for GE stock

Order to be able to fully fund her four-year college : How much more do Amy's parents need to save at the end of each month from now to Amy turns to age 18 in order to be able to fully fund her four-year college.

What is the projected dividend for coming year : The required return on this stock is 12 percent, and the stock currently sells for $62 per share. What is the projected dividend for the coming year?

What was your dollar return and percent return : It ended last year at $111.49 If you owned 340 shares of FedEx, what was your dollar return and percent return?

Compute the value of the stock in five years : Suppose that a firm's recent earnings per share and dividend per share are $2.70 and $1.70, Compute the value of the stock in five years.

User Account

All Pages