Question: Need help with this problem Homework: Risk, Return, and Capital Budgeting Assignment 0 Saved A share of stock with a beta of 0.78 now sells

Need help with this problem

Need help with this problem Homework: Risk, Return, and Capital Budgeting Assignment

Homework: Risk, Return, and Capital Budgeting Assignment 0 Saved A share of stock with a beta of 0.78 now sells for $58. Investors expect the stock to pay a yearend dividend of $2. The Tbill rate is 5%, and the market risk premium is 8%. 3.6 a. Suppose investors believe the stock will sell for $60 at yearend. Calculate he opportunity cost of capital. Is the stock a good or bad points buy? What will investors do? {Do not round intermediate calculations. Round your opportunity cost of capital calculation as a percentage rounded to 2 decimal places} Opportunity cost of capital eBook The stock is a u buy and the investors will not invest Prim b. At what price will the stock reach an \"equilibrium" at which it is perceived as fairly priced today? {Do not round intermediate calculations. Round your answer to 2 decimal places.) Slack price

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