[tbrendanc]

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

[ArcSine]

Without giving away the exact location of the buried treasure, here are a few clues for the treasure map...

Start by determining the market's overall risk premium, which is the excess of the market's return over the risk-free rate.

Absent any other info, as in this case, an individual equity's required return will be the risk-free rate, plus that stock's risk premium. You'll use each stock's beta to determine its own risk premium.

Then the portfolio's expected return will be the weighted average of the individual returns, where the weights are the amounts of the individual holdings, relative to the cost of the entire portfolio.

K's intrinsic value can be obtained from the constant-growth model (aka Gordon, or Gordon-Shapiro). When you look that one up in your text, remember that most renderings of the CGM use expected dividends one year out in the numerator, whereas in your info, "Stock K just paid a dividend...".