1.An investor has a stock investment with a beta of 1.25. He was expecting to have the return on his stock at 18% when the market risk premium was 8%. If the revised market risk premium is 10%, what will be the new expected return on investment? 2. Dividends per share and market value per share was recently at P32 and P240 respectively. If dividends grow at 2% per year, what would the dividend-on value of the shares be 5 years from now?

Hi student Since there are multiple questions, we will answer only first question.

1.An investor has a stock investment with a beta of 1.25. He was expecting to have the return on his stock at 18% when the market risk premium was 8%. If the revised market risk premium is 10%, what will be the new expected return on investment?

1.An investor has a stock investment with a beta of 1.25. He was expecting to have the return on his stock at 18% when the market risk premium was 8%. If the revised market risk premium is 10%, what will be the new expected return on investment?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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