2. XYZ stock sells for $25 and pays an annual per share dividend of $1.50. It is expected to grow annually at 8%. A. What is your expected return on this stock? Answer B. What would be the expected return if the stock price were $35? Answer FI 210 Chapter 11 Homework Page 2 3. The risk free rate of return is 2%. The expected return on the market is 6%. Stock M has a beta coefficient of 1.4. The dividend growth rate is 5 %. The dividend is $2.60 a chare. What should be the price of this stock? What is K? What should be the price of the stock? (Hint: First solve for K. Then use the K in the dividend growth model). 4. What is the value of a stock if it is earning $2.37 a share and the appropriate earnings per share multiple or P/E is 8