The preferred stock of Dallas Platinum Exchange has a par value of $31 and pays a 7% dividend rate per year. You calculated a beta of 0.51 for the stock. The risk-freerate is 4.11% and the market return is 9.2%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock? DO NOT ENTER THE $ SIGN. ALSO,ENTER YOUR ANSWER AS A POSITIVE NUMBER. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO TWO DECIMAL PLACES AT THE END, i.e.IF YOUR ANSWER IS 33.4348 ENTER IT AS 33.48 ONLYQuestion 4Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You haveestimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase?O Nathan's BakeriesO Z-man ElectronicsO OO All of the stocksOOO Anderson, Inc.O Delta VanlinesFirmBeta ExpectedReturnAnderson, Inc. 0.90 10.5%Delta Vanlines 1.24 13.0%Nathan's1.50 16.0%BakeriesZ-manElectronics2.15 19.0%

Preferred stocks are paid dividend on the par value and value of stock depends on the required rate…

he preferred stock of Dallas Platinum Exchange has a par value of $31 and pays a 7% dividend rate per year. You calculated a beta of 0.51 for the stock. The risk-free ate is 4.11% and the market return is 9.2%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock? DO NOT ENTER THE $ SIGN. ALSO, NTER YOUR ANSWER AS A POSITIVE NUMBER. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO TWO DECIMAL PLACES AT THE END, i.e. F YOUR ANSWER IS 33.4348 ENTER IT AS 33.48 ONLY

he preferred stock of Dallas Platinum Exchange has a par value of $31 and pays a 7% dividend rate per year. You calculated a beta of 0.51 for the stock. The risk-free ate is 4.11% and the market return is 9.2%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock? DO NOT ENTER THE $ SIGN. ALSO, NTER YOUR ANSWER AS A POSITIVE NUMBER. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO TWO DECIMAL PLACES AT THE END, i.e. F YOUR ANSWER IS 33.4348 ENTER IT AS 33.48 ONLY

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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The common stock of Anthony Steel has a beta of 1.1. The risk-free rate is 5 percent and the market risk premium (rm - rf) is 5 percent. What is the company's cost of common stock, rs? Express your answer in percentage (without the % sign) and round it to two decimal places.
The risk-free rate of return is 3 percent, and the expected return on the market is 7 percent. Stock A has a beta coefficient of 1.3, an earnings and dividend growth rate of 5 percent, and a current dividend of $2.10 a share. Do not round intermediate calculations. Round your answers to the nearest cent. What should be the market price of the stock? $ If the current market price of the stock is $91.00, what should you do? The stock -Select-shouldshould notItem 2 be purchased. If the expected return on the market rises to 13.1 percent and the other variables remain constant, what will be the value of the stock? $ If the risk-free return rises to 4.5 percent and the return on the market rises to 13.9 percent, what will be the value of the stock? $ If the beta coefficient falls to 1.2 and the other variables remain constant, what will be the value of the stock? $ Explain why the stock’s value changes in c through e. The increase in…
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Your broker has recommended that you purchase stock in Beacan, Inc. Beacan recently paid its annual dividend ($7.00). Dividends have consistently grown at a rate of 2.50%. Analysts estimate that the stock has a beta of 1.42. The current risk-free rate is 2.80% and the market risk premium (RM - RF) is 6.50%. Assuming that CAPM holds, what is the intrinsic value of this stock?
The risk-free rate of return is 1 percent, and the expected return on the market is 7.1 percent. Stock A has a beta coefficient of 1.6, an earnings and dividend growth rate of 7 percent, and a current dividend of $1.50 a share. Do not round intermediate calculations. Round your answers to the nearest cent. What should be the market price of the stock? $ If the current market price of the stock is $55.00, what should you do? The stock be purchased. If the expected return on the market rises to 12.4 percent and the other variables remain constant, what will be the value of the stock? $ If the risk-free return rises to 2 percent and the return on the market rises to 13 percent, what will be the value of the stock? $ If the beta coefficient falls to 1.3 and the other variables remain constant, what will be the value of the stock? $ Explain why the stock’s value changes in c through e. The increase in the return on the market the…
A share of stock with a beta of 0.78 now sells for $58. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 5%, and the market risk premium is 8%. a. Suppose investors believe the stock will sell for $60 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? b. At what price will the stock reach an "equilibrium" at which it is perceived as fairly priced today? Complete this question by entering your answers in the tabs below. Required A Required B Suppose investors believe the stock will sell for $60 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? Note: Do not round intermediate calculations. Round your opportunity cost of capital calculation as a percentage rounded to 2 decimal places. Opportunity cost of capital The stock is a bad buy and the investors will t invest %
Assume that if M launches a new e-trading platform, its price will go up to $261. Else, M price will go down to $62. You are aware that M shares are being traded at $162. You also know that the risk-free rate is 5%.What is the probability that M price will go down?***Please round your answer to the nearest three decimals (i.e. 0.512)
Ran Company wants to determine its cost of common stock equity using the CAPM. The company's investment advisors indicate that the firm’s beta is equals to 1.3;the risk-free rate is 6%; and the market return is 10%. (Do not round off between computations. Round off the final answer to two decimal places. Example of writing your answer 2.58%)
YNA is expected to pay a dividend of $1.0 in Year 1 and $1.2 in Year 2. Analysts expect the price of YNA shares to be $19 two years from now. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. The beta of the stock is 1.2. Compute the intrinsic value of the stock. Round your answer to two decimal places and enter without the dollar sign.
Please answer fast i give you upvote.
The risk-free rate is 1.54% and the market risk premium is 8.58%. A stock with a β of 1.39 just paid a dividend of $1.30. The dividend is expected to grow at 22.14% for five years and then grow at 3.47% forever. What is the value of the stock? Don't use any AI otherwise I will give.......

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