Stock and Dividend Prices
The Nikko Company's last dividend was $1.50. The dividend growth rate is expected to be constant at 15% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If Nikko's required return (rs) is 11%, what is the company's current stock price?
Standard deviation of stocks
Assume that you have the option to invest in two Stocks U and L and that the likelihood of either a recession or an expansion in future is the same (i.e. 50%). Stock U will generate a return of 30% in a recession while stock L will result in a loss of -20%. In an expansion stock U will generate 10% return while stock L will generate a return of 70%.
What is the standard deviation of an equally weighted portfolio of stocks U and L?