1 You are considering the purchase of a stock that just paid a dividend of $3. Its dividends are expected to grow at 4% in perpetuity. The stock has a beta of 1.3, the risk-free rate is 3% and the return on an average stock in the market is 9%. a. What is the required return on this stock? nmn n00O 6 b. What should you pay for a share of this stock? c. What is the capital gains yield on this stock? 10 d. What is the dividend yield on this stock? 11 13