1. The risk-free rate of return is 5.51 percent, based on an expected inflation premium of 2.54 percent. The expected return on the market is 12.8 percent. What is the required rate of return for Envoy common stock which has a beta of 1.35?
2. Stock C currently pays dividends of $1.50, and is expected to grow by 3% indefinitely. What is the stock worth to an investor who has a 9% required rate of return?
3. Suppose the one (1) year UST is 1.3%, the two (2) year is 1.5% and three (3) year is 1.6%. What is 2f1, i.e. the one year forward rate two years from now?