1. Investors require a return of 6.3% per year to hold a perpetual preferred stock. The preferred stock has a par value of $65 per share and it pays an annual dividend of $4.25 per share. What is its intrinsic value per share?

1. $60.79

2. $67.46

3. $65.59

4. $68.32

5. $62.85

2. You manage a $6 million portfolio has a beta of 1.2 and an expected return of 14.3% per year. You intend to invest an additional $1 million in the portfolio so that the expected return increases to 14.7% per year. If the risk-free interest rate is 4.3% per year, what does the beta of the new investment need to be?

1. 1.73

2. 1.54

3. 1.62

4. 1.39

5. 1.47