Instructions: You are required to use a financial calculator or spreadsheet (Excel) to solve the problems...

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Instructions: You are required to use a financial calculator orspreadsheet (Excel) to solve the problems (provided on page 4)related to risk and return characteristics and stock/bondvaluation. You are required to show the following three steps foreach problem (sample problems and solutions are provided forguidance):
(i) Describe and interpret the assumptions related to theproblem.
(ii) Apply the appropriate mathematical model to solve theproblem.
(iii) Calculate the correct solution to the problem.
A company’s stock had a required return of 11.50% last year,when the risk-free rate was 5.50% and the market risk premium was4.75%. Now, suppose there is a shift in investor risk aversion, andthe market risk premium increases by 2.00%. The risk-free rate andthe beta remain unchanged. What is this company’s new requiredreturn (round your answer to two decimal places)?

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iGiven informationCompanys stock return last year 1150Risk free rate 550Market risk premium 475We have given this information To calculate required return wehave many formulae but here we have given last years dataRisk measure as beta remains constant It is assumed that givenstock return of 1150 is companys expected rate of See Answer

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Instructions: You are required to use a financial calculator orspreadsheet (Excel) to solve the problems (provided on page 4)related to risk and return characteristics and stock/bondvaluation. You are required to show the following three steps foreach problem (sample problems and solutions are provided forguidance):(i) Describe and interpret the assumptions related to theproblem.(ii) Apply the appropriate mathematical model to solve theproblem.(iii) Calculate the correct solution to the problem.A company’s stock had a required return of 11.50% last year,when the risk-free rate was 5.50% and the market risk premium was4.75%. Now, suppose there is a shift in investor risk aversion, andthe market risk premium increases by 2.00%. The risk-free rate andthe beta remain unchanged. What is this company’s new requiredreturn (round your answer to two decimal places)?