Financial Math Answers

A stock that currently trades for $40 per share is expected to pay a year-end dividend of $2 per share. The dividend is expected to grow at a constant rate over time. The stock has a beta of 1.2, the risk-free rate is 5 percent, and the market risk premium is 5 percent. What is the stock’s expected price seven years from today? *

Suppose you held a diversified portfolio consisting of 10 different common stocks, investing $500 in each stock. The portfolio’s beta is 1.9. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 0.8 for $500 and use the proceeds to buy another stock with a beta of 1.25. What would your portfolio’s new beta be?

. A company’s common share has a price of $300, and the company will pay a dividend (D1) of dividend of $9. If the dividend is expected to grow at a constant rate, what would the growth rate be if the required rate of return is 15%?

hudson earns $8.76 per hour for the first 7 hours he works each day, then double time after that. find the double-time hourly rate

Company X has a beta of 1.75, while Company Y has a beta of 2.1. The return on the market is 14%, and the risk-free rate is 7%. By how much does Company’s required return exceed Company’s required return?

You want to buy a car. The loan amount will be $24,000. The company is offering a 2% interest rate for 36 months (3 years). What will your monthly payments be?

Discuss the impact of the second pillar (environmental) of sustainability on capital investment decisions.

An investor is forming a portfolio by investing $50,000 in stock A that has a beta of 1.50, and $25,000 in stock B that has a beta of 0.90. The return on the market is equal to 6 percent and Treasury bonds have a yield of 4 percent. What is the required rate of return on the investor’s portfolio?

The risk-free rate is 5 percent. Stock A has a beta 1.2 and Stock B has a beta 1.4. Stock A has a required return of 11 percent. What is Stock B’s required return?

The risk-free rate of interest, rf, is 6 percent. The overall stock market has an expected return of 12 percent. Maro, Inc. has a beta of 1.2. What is the required return of Maro, Inc. stock?