BUS-F 370 Lecture Notes - Lecture 8: S&P 500 Index, Infor
Document Summary
Homework #8: due sunday, october 30th at 11:55pm: you are currently doing some market analysis and determine that the yield on one-year. At the same time you determine that the s & p 500 (what you call the market ) has had an average return of 8. 2%. The difference between these two yields is, of course, 5. 8%. 1: a firm makes and sells products that are in the category of luxury goods. You are considering a stock that is twice as risky as the average risk in the market. What risk premium should you require: 4. 4, 17. 4, 13. 0, 8. 7, none of the above, you are considering purchasing a stock. Assume that the risk-free rate is 2. 5% and the. The stock you are considering has a beta of 0. 80; your analysis indicates that the company should pay a dividend in one year of sh. 50 per share and that the dividend should grow at 2. 2% per year.
