Problem 6-5 Expected Return: Discrete Distribution

A stock's return has the following distribution:

Demand for the Company's Products	Probability of This Demand Occurring			Rate of Return if This Demand Occurs (%)
Weak		0.1		-30%
Below average		0.2		-10
Average		0.4		11
Above average		0.2		30
Strong		0.1		70
		1.0

Calculate the stock's expected return. Round your answer to two decimal places. ________%

Calculate the standard deviation. Round your answer to two decimal places. ____________%

Problem 7-3 Constant Growth Valuation

Woidtke Manufacturing's stock currently sells for $28 a share. The stock just paid a dividend of $1.00 a share (i.e., D0 = $1.00), and the dividend is expected to grow forever at a constant rate of 8% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. _____________$

What is the estimated required rate of return on Woidtke's stock? Do not round intermediate calculations. Round the answer to three decimal places. _____________ %