23. A company's stock has a beta of 1.2, and its return R₁,t has the following structure: R₁t 1.2RM,t + €1,t. The stock price was $100 in year 0. The following year, the company was sued for fabricating its financial statements. In response, its stock price fell to $60, and no dividend was paid. In the same year, the market return was 5%. Find the amount of return attributable to the company-specific news (lawsuit).

Doc Brown, Inc. just paid a dividend of D0 = $1.21.  Analysts expect the company's dividend to grow by 29% this year, by 29% in Year 2, and at a constant rate of 5% in Year 3 and thereafter.  The required return on this low-risk stock is 10%.  What is the best estimate of the stock’s current market value, $ xxx.xx, no $ sign?

A particular stock has a dividend yield of 1.3 percent. Last year, the stock price fell from $72 to $56. What was the return for the year? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. -9.22 % Return for the year

Porter Plumbing's stock had a required return of 11.00% last year when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return?  Select the correct answer. a. 13.32% b. 13.42% c. 13.52% d. 13.62% e. 13.72%

Suppose that a firm with a stock price of $80 just announced that it expects to pay a $100 per share liquidating dividend in 1 year, although the exact amount of the dividend depends on the performance of the company this year. Assume that the CAPM is a good description of stock price returns and that the stock’s beta is 1.5, the market’s expected return is 12%, and the risk-free rate is 5%. 1) Is the stock priced correctly now? 2) What is the alpha of the stock? 3) What would you expect to happen to the stock price in an efficient market after the announcement? Give typing answer with explanation and conclusion

1. The stock of Carlo Elise Corporation went from Php50 to Php56 last year. The firm also paid Php2 in dividends. Compute the rate of return. 2. In the following year, the dividend was raised to Php2.25. However, a bear market developed toward the end of the year, and the stock price declined from Php56 at the beginning of the year to Php48 at the end of the year. Compute the rate of return or (loss) to stockholders. 3. Assume the real rate of return in the economy is 2.5 percent, the expected rate of inflation is 5 percent, and the risk premium is 5.8 percent. Compute the risk-free rate (Formula 1-3) and required rate of return. 4. Assume the real return in the economy is 4 percent. It is anticipated that the consumer price index will go from 200 to 210. Shares in common stock are assumed to have a required return one-third higher than the risk-free rate. Compute the required return on common stock.

The MM Company has fallen on hard times. Its management expects to pay no dividends for the next 2 years.  However, the dividend for Year 3 (D3) will be $1.00 per share, and it is expected to grow at a rate of 3% in Year 4, 6% in Year 5, and 10% in Year 6 and thereafter. If the required return for MM Co. is 20%, what is the current equilibrium price of the stock?

Doc Brown, Inc. just paid a dividend of D0 = $1.21. Analysts expect the company's dividend to grow by 20% this year, by 20% in Year 2, and at a constant rate of 6% in Year 3 and thereafter. The required return on this low-risk stock is 13%. What is the best estimate of the stock's current market value, $ xxx. xx, no $ sign? Please explain with all steps:( Excel would be best)

SATA stock currently sells for RM123. It's expected earnings per share are RM5.12. The average P/E ratio for the industry is 24. If investors expected the same growth rate and risk for SATA as for an average firm in the same industry, it's stock price would Select one: a. stay about the same. b. fall. c. there is not enough information. d. rise.

6. The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: (LO 5-2) Boom Normal economy Recession Dividend $2.00 1.00 0.50 Stock Price $50 43 34 a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 4%.