Question: Please post the formula along with the answer. (Preferably excel formula - whichever works easier) 3. 3. (10 pts) Find the expected return and standard
Please post the formula along with the answer. (Preferably excel formula - whichever works easier)
3. 3. (10 pts) Find the expected return and standard deviation (of its return) for the stock below? 18% Common Stock Probability Return .2 -2% .5 .3 27% 4. An analyst has made the following estimate of Company Z's dividends. After 5 years of growing annually at 2% from an initially value of $1.00, company Z is expected to quit growing and pay a constant dividend of $1.5 indefinitely. (10 pts) If the required return is 12%, what should the stock of Company Z sell for today? 5. (10 pts) You are considering an investment. After a great deal of careful research you determine that the expected return on the investment is 15% per annum. You also estimate the beta to be 2.0. The risk-free rate of interest is 3% and the return on the market is expected to be 13%. Should you accept the project? Explain
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