If the expected rate of return for a security is 18 beta2


1. A security pays a yearly dividend of €11,00 Market rate is 12%, risk free rate 3% and Beta = 0.80 - What would be its price today?

And if its dividend growths yearly 1,1% - then what would be its Price?

2. A security pays a constant dividend of €7,00 during 5 years, and on the fifth year we could sell it at a Price of €75,00, Market rate is 19%, risk free rate 2% and Beta = 1.80. - What would be its Price today?

And if its dividend growths 1.7% each year along these 5 years. -Then .shat w maid be its price?

3. A security pays a constant dividend of €0.45 SEMI-ANNUALLY along 3 years, and thereafter dividend will be growing 1% SEMI-ANNUALLY Market rate is 9%, risk free rate 0.50% and Beta =  2.1. What would it be its Price today?

4. A security pays dividend as follows: first year €1,25, second year €2,25, third year €3,25, fourth year €4,25 and then dividend will grow 1,25% yearly. Market rate is 9%, risk free rate 0,25% and  beta = 2.20. What would be its price today?

5. A security pays a constant dividend of €0,90 during five years, and thereafter will be sold al €10,00, Market rate is 18%, risk free rate 2,50% and Beta=1.55. What would be its price today?

6. At what price have I purchased a security ill already made a €5,00 profit, and this security pays dividend as follows: first year €1,50, second year €2,25, third year 3€,10, and on third year I will sell it for €18,00. Market rate is 8%, risk free rate 0,90% and Beta=2.30.

7. What is the original maturity (in moths) for a Zero Coupon Bond, Face Value 2,500,00€, required rate of return 16% EAR if we paid 700,00€ and we bought it 6 month after the issuance, and actually we made an instant profit of 58,97€.

8. At what price have I purchased a security if I already made a €2,00 profit, and if this security pays quarterly dividend as follows: first quarter €1,00, second quarter €2,00, third quarter €3,00, and on third quarter I will sell it for €50.00. Market rate is 7%, risk free rate 1.10% and Beta=2.1.

9. If the expected rate of return for a security is 18%. Beta=2 and market rate is 12%, then what is it the Risk Free Rate?

10. If the expected rate of return for a security is 12%, Beta=3 and market-rate is three times the Risk Free Rate. What is it the market rate?

11. You'll need 10 Vespas for your Parcel Delivery Business. Each Vespa has a price of 2.850€ fully equipped. Your Bank is going to Mud this operation with a 5 years loan, 12% nominal rate at the beginning, and alter increasing 1% every year. You'll have 5 years to fully amortize this loan. You want to make Monthly Installments. At what price should you sell it after 3 1/2 years to lose only 10% of the remaining debt?

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Finance Basics: If the expected rate of return for a security is 18 beta2
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