I need some help finding the expected rate of return for McDonald’s. here’s their statistics: http://finance.yahoo.com/q/ks?s=MCD the formula for expected rate of return is: k = (D/Po) + g Po = McDonald’s stock price, 60.03 D = Foward annual dividend rate, 1.50 g = Qtly earnings growth rate, 24.10% So expected rate of return = k= (1.50/60.03) + 24.10% k = 24.14%? Or should i change the percent to decimal? These numbers are from the the link above. Also, Required Return Formula is K= Krf +(Km + Krf)beta Beta = 1.58 Km = market rate of return as S&P 500 index annual rate of return (S&P500 52-Week Change), -6.42% Krf = the yield on the U.S. Treasury 3-month bond, 1.41% so required return is: k = 1.41% + (-6.42-1.41%)1.58 k = -10.96% ? Is any of this right? thanks.
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He’s not as bad as that sunshine dude asking for undergrad help. At least there is an attempt above. Sunshine would post things like, “Help, I can’t figure out the effective rate of 12% compounded quarterly.”