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Please review this question it is answered in three questions. Please make sure it is correct I sometimes have to repeat the question.

5. Firm C Stock tends to be 30% more volatile vs. the General Market. The S & P 500 is expected to yield a 12% Rate of Return. If T-Bills yield a 2% ... Return, what is the Required Rate of Return on Stock C ?

6. Assume that Stock C above is expected to yield a 14% ... Return. Should one invest in Stock C ? Why or why not ?

7. Assume that Stock C above just paid a $ 4.00 Dividend Per Share. The Growth Rate for each of the next 3 years is 5% annually. Beyond Year 3, growth will level off at 2% per year indefinitely. What is the Stock Price for each share of Stock C ?

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Beverley Smith
Beverley SmithLv2
28 Sep 2019

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Please can you make sure that this answer is correct the first time. I always have to repeat the questions.

Firm C Stock tends to be 30% more volatile vs. the General Market. The S & P 500 is expected to yield a 12% Rate of Return. If T-Bills yield a 2% ... Return, what is the Required Rate of Return on Stock C ?

I need this question repeated because last time I posted this question. I could barely read the answer. Please can you answer the question as if I am doing it by hand using the calculater

1. Stock A tends to be 50% more volatile vs. ... the General Market. If T-Bills are paying approximately 2%..., please determine the % Required Rate of Return on Stock A assuming that the Market Premium is 12%.

2. For the immediately preceding problem, please determine the Expected % Return on the General Market.

3. Based upon Problems # 1 and # 2 above, if the Expected % ... Return is 14%, should one invest in Stock A ? Why or why not ?

SCI just paid a dividend (D_0) of $3.60 per share, and its annual dividend is expected to grow at a constant rate (g) of 7.50% per year. If the required return (r_s) on SCI's stock is 18.75%, then the intrinsic value of SCI's shares is per share.
 
Which of the following statements is true about the constant growth model?
When using a constant growth model to analyze a stock, if an increase in the growth rate occurs while the required return remains the same, this will lead to a decreased value of the stock.
When using a constant growth model to analyze a stock, if an increase in the growth rate occurs while the required return remains the same, this will lead to an increased value of the stock.
 
Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.:
 
a. If SCI's stock is in equilibrium, the current expected dividend yield on the stock will be_________ per share.
b. SCI's expected stock price one year from today will be_________ per share.
c. If SCI's stock is in equilibrium, the current expected capital gains yield on SCI's stock will be______?

 

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