IV. The following stock quotation for Merck stock reported on Friday, May 13, 2022 when market closed at 4:00 PM Eastern

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Iv The Following Stock Quotation For Merck Stock Reported On Friday May 13 2022 When Market Closed At 4 00 Pm Eastern 1 (56.02 KiB) Viewed 46 times

IV. The following stock quotation for Merck stock reported on Friday, May 13, 2022 when market closed at 4:00 PM Eastern time Merck & Co., Inc. (MRK) NYSE - NYSE Delayod Price. Currency in USD 75.29+1.06 (+1.43%) At close: 4:04PM EDT 7.29 Previous Close Open Bid Ask Day's Range 52 Week Range Volume 74.23 Market Cap 155.628B 73.88Beta (5Y Monthly) 1.29 75.29 x 1100 PE Ratio (TTM) 10.33 75.38 x 1200 EPS (TTM) 73.80 - 75.88 Earnings Date Jul 14,2022 38.76 - 76.84 Forward Dividend & Yield 2.04 (2.70% 17,410,500 Ex-Dividend Date Apr 30, 2022 19,407,114 1y Target Est 85.02 Avg. Volume (1) What was May 13 close price of Merck stock? How did it change from previous day (May 12) (2) If you purchased Merck stock at the 52 weeks low and sold it at close price on May 13, 2022. You have received dividend during this holding period. Calculate your holding period rate of return (3) Show how the 2.70 % yield is calculated, (4) Currently, the 3-month T-bill interest rate is 0.9%, and required return on the stock market is 11.9%. Calculate required rate of return of Merck stock using the CAPM model. (5) Assume dividend growth rate is 10%, calculate the true value and annual rate of return using dividend valuation model. (6) Draw a security market line (SML) using the data above. Determine the intercept and slope of the SML (7) According to the CAPM model, will you buy Merck stock or not? Why? (32 points)