1. Problem- Portfolio Beta
You have a portfolio with a beta of 1.30. What will be the new portfolio beta if you keep 84 percent of your money in the old portfolio and 16 percent in a stock with a beta of 1.07? (Do not round intermediate calculation and round your answer to 2 decimal places.)
New portfolio beta =
2. Problem- Required Return
Paccar’s current stock price is $83.25 and it is likely to pay a $3.07 dividend next year. Since analysts estimate Paccar will have an 14.2 percent growth rate, what is its required return? (Round your answer to 2 decimal places.)
Required return =