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View Full Version : Required returns on stock and Intrinsic values


tbrendanc
Oct 25, 2009, 08:42 PM
Could someone help me with this question?

What are the required returns on stock J and Stock K individually?
What is required return on the portfolio?
If Stock K just paid a dividend of $2.50, what is stock K's intrinisic value?

market return (rm)=9%
the risk free rate =5%
Stocks J's beta=0.8
expected constant growth rate for Stock J=6%
Investment in Stock J=$80,000
Stock K's beta=1.4
Expected constant growth rate for Stock K=7%
Investment in Stock K=$120,000

morgaine300
Oct 25, 2009, 09:22 PM
Can you please not double-post. It tends to confuse people.

Also, you need to read the guidelines on posting homework that are at the top of the forum. Have you attempted this yet?