Earnings per share will increase to $ 3.
Total firm value will not change.
Price-earnings ratio will be 12.55.
Retained earnings will increase by $ 462,000.
The common stock of Dayton Repair sells for $ 43.19 a share. The stock is expected to pay $ 2.28 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.15 percent annually and expects to continue doing so. What is the market rate of return on this stock?
7.67 percent
7.59 percent
7.43 percent
7.14 percent
7.28 percent
Which one of the following should earn the most risk premium based on CAPM?
Diversified portfolio with returns similar to the overall market.
Stock with a beta of 1.38.
Portfolio with a beta of 1.01.
U. S. Treasury bill.
Stock with a beta of 0.74.