3) Assume the expected market risk premium is 10% and the risk - free rate is 5%. a. ZPL stock is now selling for $68 per share. It will pay a dividend of $3 per share at the end of the year. The beta? ( expected price for ZPL at the end of the year is $77.24. What is its ;) b. Kelvin is buying a stock with an expected perpetual dividend of $300 but is unsure of its risk. If Kelvin thinks the beta of the stock is 0.8, when the beta is really 1.3, how much more will he offer for the stock t
3) Assume the expected market risk premium is 10% and the risk - free rate is 5%. a. ZPL stock is now selling for $68 per share. It will pay a dividend of $3 per share at the end of the year. The beta? ( expected price for ZPL at the end of the year is $77.24. What is its ;) b. Kelvin is buying a stock with an expected perpetual dividend of $300 but is unsure of its risk. If Kelvin thinks the beta of the stock is 0.8, when the beta is really 1.3, how much more will he offer for the stock t
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3) Assume the expected market
risk premium is 10% and the risk
- free rate is 5%. a. ZPL stock is
now selling for $68 per share. It
will pay a dividend of $3 per
share at the end of the year. The
beta? (
expected price for ZPL at the end
of the year is $77.24. What is its
;) b. Kelvin is
buying a stock with an expected
perpetual dividend of $300 but is
unsure of its risk. If Kelvin thinks
the beta of the stock is 0.8,
when the beta is really 1.3, how
much more will he offer for the
stock t
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