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3.) (10 points) A stock is currently selling for $72 a share. Forecasts place the price of the stock at $80 a share one year
3.) (10 points) A stock is currently selling for $72 a share. Forecasts place the price of the stock at $80 a share one year from now. It is expected that the stock will have dividends of $1.30 per share one year from now. The beta of the stock is 1.3. The risk-free rate of return is 2.0% and is expected to stay constant for the next year. The broader market is expected to return 11.0% this year. Calculate both the one-year holding period return for the stock and the stocks required rate of return, and then use this information to determine if the stock is a good buy. Show your work to justify your
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