1. Which of the following is the same synthetic position as short stock, long call?
2. Suppose Paycheck, Inc., has a beta of 0.96. If the market return is expected to be 13.50 percent and the risk-free rate is 4.50 percent, what is Paycheck’s risk premium? (Round your answer to 2 decimal places.)
3. Suppose Universal Forest’s current stock price is $58.00 and it is likely to pay a $0.60 dividend next year. Since analysts estimate Universal Forest will have a 4.8 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)