Alpha Geek

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Category > Business & Finance Posted 06 May 2017 My Price 5.00

You are offered two stocks

You are offered two stocks. The beta of A is 1.4 while the beta of B is 0.8. The growth rates of earnings and dividends are 10 percent and 5 percent, respectively. The dividend yields are 5 percent and 7 percent, respectively.
a) Since A offers higher potential growth, should it be purchased?
b) Since B offers a higher dividend yield, should it be purchased?
c) If the risk-free rate of return were 7 percent and the return on the market is expected to be 14 percent, which of these stocks should be bought?

Answers

Alpha Geek
(8)
Status NEW Posted 06 May 2017 10:05 AM My Price 5.00

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file 1494068387-Answer.docx preview (138 words )
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