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
Related questions
Question
Transcribed Image Text:An analyst gathered the following information for a stock and market parameters:
. stock beta= 1.11;
expected return on the Market - 9.55%;
expected return on T-bills- 2.03%;
. current stock Price = $5.62;
.
.
.
.
expected stock price in one year $11.26;
expected dividend payment next year = $2.29.
-
Calculate the required return for this stock. Please share your answer as a percentage
rounded to 2 decimal places.
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