ANSWER ALL 3

1) analyst got the following information for a stock and market parameters; stock beta =1.1 ; expect of return on the market= 9.37%; expected return on t-bills=3.78%; current stock price= $7.39; expected stock price in one year = $13.84;expected dividend payment next year = $1.59. Calculate the required return expected return for the stock

a) required return

b) expected return

2) The market risk premium for next period is 8.88% and the risk free rate is 2.74%. Stock Z has a beta of 0.630 and an expected return of 12.35%. Compute the following

a) markets reward to risk ratio

b) stock Z's reward to risk ratio

3) an analyst gathered the following information for a stock and Market parameters: stock beta=1.070; expected return on the market=10.50%; expect a return on T-bills= 3.30%; current stock price= $7.62; expected stock price in one year= $13.08; expected dividend payment next year = $1.29. Calculate the

a) required return for this stock

b) expected return for this stock

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