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Second Part: Assume that Bon Temps has a beta coefficient of 1.2, that the risk-free...

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Finance

Second Part:

Assume that Bon Temps has a beta coefficient of 1.2, that the risk-free rate (the yield on T-bonds) is 3%, and that the required rate of return on the market is 8%. What is Bon Tempss required rate of return?

Assume that Bon Temps is a constant growth company whose last dividend (, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 4% rate. What is the firms expected dividend stream over the next 3 years? What is its current stock price?

What is the stocks expected value 1 year from now?

What are the expected dividend yield, capital gains yield, and total return during the first year?

Now assume that the stock is currently selling at $40.00. What is its expected rate of return?

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