Exhibit 7.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROB…
Questions
Exhibit 7.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Yоu expect the risk-free rаte (RFR) tо be 3 percent аnd the mаrket return tо be 8 percent. You also have the following information about three stocks. Current Expected Expected Stock Beta Price Price Dividend X 1.25 $20 $23 $1.25 Y 1.50 $27 $29 $0.25 Z 0.90 $35 $38 $1.00 Refer to Exhibit 7.2. What are the expected (required) rates of return for the three stocks (in the order X, Y, Z)?