You have a portfolio that is 39 percent invested in Stock R,…

You have a portfolio that is 39 percent invested in Stock R, 40 percent invested in Stock S, with the remainder in Stock T. The expected returns of these stocks are 15.8 percent, 12.8 percent, and 16.4 percent, respectively. What is the expected return on the portfolio?

Piedmont Hotels is an all-equity company. Its stock has a be…

Piedmont Hotels is an all-equity company. Its stock has a beta of 0.92. The market risk premium is 7.7 percent and the risk-free rate is 3.5 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 2.7 percent to the project’s discount rate. What should the firm set as the required rate of return for the project?

Last year, you purchased a stock at a price of $70.39 a shar…

Last year, you purchased a stock at a price of $70.39 a share. Over the course of the year, you received $2.47 per share in dividends and inflation averaged 2.9 percent. Today, you sold your shares for $86.46 a share. What is your approximate real rate of return on this investment?

Over the past 35 years, the common stock of The Flower Shopp…

Over the past 35 years, the common stock of The Flower Shoppe has produced an arithmetic average return of 12.96% percent and a geometric average return of 8.56% percent. What is the projected return on this stock for the next 9 years according to Blume’s formula?