Answer to MTP Intermediate Syllabus 2012 Dec2014 Set 2

8.33 0.6 5 payout ratio Dividend EPS ` According to Walter Model = k k r D (E-D) P = 0.14 0.14 0.20 5 (8.33- 5) = 69.69 (j) X owns a stock portfolio equally invested in a risk free asset and two stocks. If one of the stocks has a beta of 0.8 and the portfolio is as risky as the market what must be the beta of the other stocks in the portfolio? ................
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