Question: Without using excel Beta = covariance of (X, M) / Variance of market (M) = 0.0026 / 0.0048 = 0.54 7. (8 points) Stock X

Without using excel Without using excel Beta = covariance of (X, M) / Variance of

Beta = covariance of (X, M) / Variance of market (M)
= 0.0026 / 0.0048
= 0.54

7. (8 points) Stock X just paid a dividend of $2.0 a share. Growth is expected to be 8% for 6-years and then 3% there on. Given E(RM) - 9% and RF-4% and using the beta from Problem 6, find P2

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