What would be the beta of your resulting investment

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1. You have $20000 to invest in the stock market and you want to buy 1000 shares of spurs inc., which is trading at $30 per share and has a beta of 1.3. Assuming that you can buy on margin at the risk free rate from your broker, what would be the beta of your resulting investment?

a) 1.65

b) 1.8

c) 1.95

d) 2.1

e) 2.25

2. Investors expect SCANA's dividends to grow at a constant 3% rate indefinitely. If the next dividend in one year is expected to be $1.2 and the required return of the shareholders is 10%, what should be the price of a share of SCANA?

a) $17.1

b) $20

c) $23.3

d) $24.0

e) $28.0

Reference no: EM131354510

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