FIN Unit 3 IP - 1 Unit 3 Individual Project Lorraine Huff...

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Unformatted text preview: 1 Unit 3 Individual Project Lorraine Huff FIN410-1003A-07: Financial Management American InterContinental University July 4, 2010 2 1. Find an estimate of the risk-free rate of interest, krf. To obtain this value, go to Bloomberg.com: Market Data [http://www.bloomberg.com/markets/index.html] and use the "U.S. 10-year Treasury" bond rate as the risk-free rate. In addition, you also need a value for the market risk premium. Use an assumed market risk premium of 7.5%. COUPON MATURITY PRICE/YIELD PRICE/YIEL D CHANGE TIME US 10-Year 3.500 05/15/2020 104-14 / 2.98-0-08+ / .030 07/02 2. Download this IBM Stock Information document (.pdf file). Please note that the following information contained in this document must be used to complete the subsequent questions. 1. IBM's beta () = 1.64 2. IBM's current annual dividend = .80 3. IBM's 3-year dividend growth rate (g) = 8.2% 4. Industry P/E = 23.2 5. IBM's EPS. = $4.87 3. With the information you now have, use the CAPM to calculate IBM's required rate of return 3....
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FIN Unit 3 IP - 1 Unit 3 Individual Project Lorraine Huff...

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