Part 2 (ch10) Questions Numeric

Important

Type your answers with “.” instead of “,”! For numerical answers, use 2 decimal places. For instance, if your answer is 0.12345 or 12.345%, type, “12.34” in the box.

Question 1

Q: You bought a stock one year ago for 9.623 per share and sold it today for 13.185. It paid a 1.091 per share dividend today.

What was your realized return?

How much of the return came from dividend yield and how much came from capital gain?

  • Dividend Yield:

  • Capital gain:

Answer:

  1. 48.357

  2. 11.34

  3. 37.016

Question 2

Q: Suppose the market risk premium is 7.989 and the risk-free interest rate is 4.993. Calculate the cost of capital of investing in a project with a beta of 0.863?

Answer:

  1. 11.888