Answer:
5%
Explanation:
The security is 12.5%
The stock beta is 1.9
The risk free interest rate is 3%
Therefore the expected market return can be calculated as follows
12.5= 3 + 1.9×Market return
12.5= 3 + 1.9market return
12.5-3= 1.9market return
9.5= 1.9market return
market return= 9.5/1.9
= 5%
Hence the expected market return is 5%
Answer:
$94.92 is the correct answer
Explanation:
Given, Annual dividend = $3.55
Required return = 3.74%
The calculation of current stock price is as follows:
The current stock price = Annual Dividend / required return
= $ 3.55 / 3.74%
= $ 94.919786
= $ 94.92
Hence the correct answer is $ 94.92
Note: The answer is rounded off to two decimal places.
Answer:
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