Question: Please answer type the question by using computer, so i can see it clearly, thank you!!! Risk-free rate is 4% Expected rate of return on

Please answer type the question by using computer, so i can see it clearly, thank you!!!

Risk-free rate is 4%

Expected rate of return on the market is 11%

1(a)The stock of NTF is presently trading at $60 a share. It will pay a $2 per share dividend at the end of the year. The expected price for NTF at the end of the year is $65.44. What is its beta?

1(b) Hints( Value of perpetual cash flow = CF/r ) Tom is buying a firm with an expected perpetual cash flow of $4,000 but is unsure of its risk. If Tom thinks the beta of the firm is 0.9, when the beta is really 1.2, how much more will Tom offer for the firm than it is truly worth?

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