Stock xyz earning at time 0 e0 250 b 40 roe 13 risk-free


Stock XYZ: earning at time 0 E0 = $2.50, b = 40%, ROE = 13%, risk-free rate is 3%, expected return on market portfolio is 9%, the beta of stock XYZ is 1.5, and CAPM is valid. (1) What’s the required rate of return k based on CAPM? (2) What’s D1 of stock XYZ? (3) What’s stock XYZ’s P/E ratio? (4) What’s PVGO?

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Financial Management: Stock xyz earning at time 0 e0 250 b 40 roe 13 risk-free
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