Question 4 (Part A-E)

Microsoft Corp (MSFT) stock has its closing price at $232.38 (2/26/21). It currently (2021) pays $0.56 per share quarterly dividend (the dividend was $0.13 per share quarterly in 2009 (12 years ago).

A) Assuming constant growth, what is the growth rate on the MSFT stock dividend?

Group of answer choices

35.90%

15..72%

12.94%

11.89%

B) For the past 5 years, the Dow Jones Industrial Average went from 16,497.00 (2/29/16) to 30,912.00 (2/26/21). Assume it represents the expected return for the market portfolio, what is the expected return for the market portfolio?

Group of answer choices

17.00%

6.48%

11.03%

37.48%

13.38%

C) Currently, the beta for MSFT stock is 0.82, and the yield on 3-month T-bill is 0.04%. What is the required return for MSFT stock based on CAPM?

Group of answer choices

11.10%

16.31%

10.98%

11.45%

D) Based the current closing price of MSFT stock on 2/26/21, what is the yield of MSFT stock?

Group of answer choices

14.03%

9.35%

10.15%

12.06%

E) Is MSFT stock over-priced or underpriced?

Group of answer choices

overpriced

correctly priced

underpriced

not enough information