Author Question: What is the required return from Truman Planned Community stock if its beta is 1.1, the return on ... (Read 31 times)

lilldybug07 · **on:** Apr 25, 2021

Question 1

What is the maximum price Erica should pay for Rangoon Corp. common stock if her required return is 5% and she expects to sell the stock in one year for $50 per share, immediately after she receives a $.50 per share dividend? (Round to the nearest tenth.)
◦ $50.00
◦ $48.10
◦ $48.00
◦ $45.00
◦ $40.73

Question 2

What is the required return from Truman Planned Community stock if its beta is 1.1, the return on the market portfolio is 12%, the risk free rate is 3%, next year's dividend will be $1.25 per share and dividends are expected to grow 5% per year?
◦ $17.86 per share
◦ $62.50 per share
◦ $53.00 per share
◦ 5.2%
◦ 12.9%

covalentbond · **Reply #1 on:** Apr 25, 2021

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