If you used Excel to do your work, please upload your Excel…

If you used Excel to do your work, please upload your Excel file to this question. If you did your work by hand, you should scan your work into ONE file using an app like Adobe Scan and upload the file to this question. If you cannot do that, you should e-mail me all pictures of your work IMMEDIATELY upon submitting the exam if you want partial credit for incorrect answers.

You buy a share of The Ludwig Corporation stock for $[P0]. Y…

You buy a share of The Ludwig Corporation stock for $. You expect it to pay dividends of $2.15, $2.3650, and $2.6015 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $ at the end of 3 years. Assuming that going forward, dividends are expected to grow at the same rate at which they have grown over the last three years, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock’s expected total rate of return ? Do not round intermediate calculations. Round your answer to two decimal places and express in percentage form (x.xx%).

Lane Manufacturing’s stock currently sells for $21 a share….

Lane Manufacturing’s stock currently sells for $21 a share. The stock just paid a dividend of $1.20 a share (i.e., D0 = $1.20), and the dividend is expected to grow forever at a constant rate of 5% a year. What is the estimated required rate of return on Lane’s stock? Do not round intermediate calculations. Round your answer to two decimal places and express in percentage form.

Stock R has a beta of 1.80, Stock S has a beta of 0.55, the…

Stock R has a beta of 1.80, Stock S has a beta of 0.55, the expected rate of return on an average stock is 8.5%, and the risk-free rate is 4%. By how much does the required return on the riskier stock exceed that on the less risky stock? Round your answer to two decimal places and express in percentage form.