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A share of stock sells for $39 today. The beta of the stock is 1.1, and the expected return on the market is 20 percent. The stock is expected to pay a dividend of $1.20 in one year. If the risk-free rate is 3.8 percent, what should the share price be in one year?

Also, please see below as the last person only answered part of it! Thank you!

A stock has a beta of 0.7 and an expected return of 8 percent. A risk-free asset currently earns 3 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Expected return % b. If a portfolio of the two assets has a beta of 0.6, what are the portfolio weights?(Round your answers to 2 decimal places. Omit the "%" sign in your response.) Weight xS % xrf % c. If a portfolio of the two assets has an expected return of 6 percent, what is its beta? (Round your answer to 2 decimal places.) Beta d. If a portfolio of the two assets has a beta of 1.40, what are the portfolio weights? (Negative amounts should be indicated by a minus sign. Omit the "%" sign in your response.) Weight xS % xrf.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92100030

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