- Portfolio required return Assume you're the money manager of $4 million investment fund. The fund consists of four stocks with following investments and betas:
|
Stock
|
Investment
|
Beta
|
|
A
|
400000
|
1.5
|
|
B
|
600000
|
-0.5
|
|
C
|
1000000
|
1.25
|
|
D
|
2000000
|
0.75
|
If the market's required rate of return is 14% and the risk-free rate is 6%, Determine the fund's required rate of return?
2. DPS Calculation Warr Corporation just paid the dividend of $1.50 share (that is, Do = $1.50). The dividend is expected to grow 7% a year for the next three years and then at five percent a year thereafter. What is the expected dividend per share for each of next five years?