Suppose an investor's portfolio contains Stock X, and he analyzes the stock's prospects and concludes that its earnings, dividends, and price can be expected to grow at a constant growth rate of 5 percent per year. The last dividend was $2.8571. Assuming that the expected rate of return on the market is 12% and the risk-free rate is 8%, and the stock has a beta of 2. If the present price of the stock is $30, should the investor:
A. Purchase more of the stock,
B. Sell the stock,
C. Maintain the present position
D. No Enough Information
Ans: B. Sell the stock,
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The mental position a person takes about a topic, person, or event is called a(n):
A) value B) attitude C) level of involvement D) cognition
Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets?
A. It is an ideal way to gain entry into a country where FDI is not limited by government regulations. B. It is a useful strategy to earn great returns from the know-how of a technologically complex process. C. It is an ideal way to establish a firm's long-term presence in a foreign country. D. It helps protect a firm's competitive advantage. E. The firm that enters into a turnkey project with a foreign enterprise avoids giving rise to potential competitors.