problem1: Apex Roofing's stock has a beta of 1.50, its required is 14 percent, and the risk free rate is 5 percent. Determine the required rate of return on the stock market? [Suggestion: 1st find the market risk premium.]
[A] 11.50%
[B] 12.00%
[C] 12.50%
[D] 10.50%
[E] 11.00%
problem3: The Connors firm's last dividend was $1. Its dividend growth rate is expected to be constant at 15 percent for 2 years, after which dividends are expected to grow at a rate of 10 percent forever. Connors' required return (rs) is 12%. Determine Connors' current stock price?
[A] $58.15
[B] $60.07
[C] $62.87
[D] $54.91
[E] $56.82