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    tbrendanc's Avatar
    tbrendanc Posts: 2, Reputation: 1
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    #1

    Oct 25, 2009, 08:42 PM
    Required returns on stock and Intrinsic values
    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's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    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?
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