Q2 a. ZF Ltd. has a security B 1.4, expected market return is 16%, risk free...
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Q2 a. ZF Ltd. has a security B 1.4, expected market return is 16%, risk free rate is 9%, Company's anticipated dividend for the year is Rs.18, Current market price is Rs.450, and price is expected to reach at Rs.520 by the end of year. Calculate expected returns & estimated returns of security and explain valuation of stock. b. Explain Interest Rate Risk & Purchasing Power Risk Q2 a. ZF Ltd. has a security B 1.4, expected market return is 16%, risk free rate is 9%, Company's anticipated dividend for the year is Rs.18, Current market price is Rs.450, and price is expected to reach at Rs.520 by the end of year. Calculate expected returns & estimated returns of security and explain valuation of stock. b. Explain Interest Rate Risk & Purchasing Power Risk
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Answer rating: 100% (QA)
a To calculate the expected returns of the security we can use the capital asset pricing model CAPM Expected return Riskfree rate Beta Expected market ... View the full answer
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
Posted Date:
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