Assignment_1\u5e26\u7b54\u6848.docx - 1 Porter Plumbing's stock had a required return of 11.75 last year when the riskfree rate was 5.50 and the market risk

Assignment_1带答案.docx - 1 Porter Plumbing's stock had...

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1. Porter Plumbing's stock had a required return of 11.75% last year, when the risk- free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? 2. Dyer Furniture is expected to pay a dividend of D 1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is Dyer's current stock price? 3. Burke Tires just paid a dividend of D0 = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5%
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  • Fall '16
  • G
  • Dyer, Risk premium, market risk premium, Porter Plumbing, Dyer Furniture

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