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Unformatted text preview: rate of return is 15%. 3. DD Company paid dividend for common stock at $1 last year. The growth rate for this company is estimated to be constant at 20% for next six years. The required rate of return is 15%. Find the value of common stock if the growth rate after six years will drop instantly to 5% and will be constant perpetually. 4. The average daily return on market and daily return for stock p is as the following table. The risk-free rate is 4% Market Return Stock p return 0.030% 0.051% 0.055% 0.088% 0.120% 0.231% 0.001% 0.004% 0.009% 0.012% a. Find the average market return b. Find beta for stock p c. Find the required return on stock p...
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- Spring '11