You are considering investing in cumulative redeemable preference shares in General Motors which is in a strong
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Question:
You are considering investing in cumulative redeemable preference shares in General Motors which is in a strong economic position at present. If the shares have par value of $25 and a dividend of $1.27, what will you be willing to pay for them if your required rate of return is 7%?
Calculate the portfolio beta and expected rate of return from the following portfolio:-
Company | Percent in portfolio | Beta | Expected return |
Plum’s Emporium | 32% | 1.4 | 17% |
Strom’s Shoes | 23% | 0.8 | 9% |
Jankowlski’s Jam | 20% | 1.0 | 10% |
Charlotte’s China | 25% | 1.3 | 15% |
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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