1. Red Sun Rising just paid a dividend of $2.07 per share. The company said that it will increase the dividend by 15 percent and 10 over the next two years, respectively. After that, the company is expected to increase its annual dividend at 3.3 percent. If the required return is 10.3 percent, what is the stock price today?
2. The risk-free rate is 3.8 percent and the market expected return is 11.5 percent. What is the expected return of a stock that has a beta of 1.23?
3. You own a portfolio that has a total value of $290,000 and it is invested in Stock D with a beta of .71 and Stock E with a beta of 1.54. The beta of your portfolio is equal to the market beta. What is the dollar amount of your investment in Stock D?