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Ch - Iowa State University
(t-1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? r = r* + IP + MRP + DRP + LP. r* = 0.03. IP Assume that the YTM remains constant for the next 3 years. What will the price be 3-years from today with 5 years of call protection. Today, ... Return Document
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Example 1: Answer - SMU
9%. If the company™s beta is 1:3, what is the price of the stock today? Answer: First, let™s –nd the required rate of return r s: r s = r RF + s (r M r RF) = 5%+1:3(9% 5% is 4 %. What is the stock™s beta? Answer: First, let™s –nd the required rate of return r s: P 0 = D 1 r s g ... Doc Viewer
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