# Finance HW Help

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.

Great - AF as a source to help with homework. Please just send it to me at biteme@yahoo.com and I’ll complete it promptly.

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.”