A stock has a beta of 1.6. The pure rate of interest is 3 percent and investors require a 3 percent inflation premium. What is the required rate of return on this stock if the market risk premium is 6 percent? (Hint: First, calculate the risk-free rate using the pure rate and the inflation premium. Next, use this risk-free rate to find the required return on the stock.) A. 16.5% B. 15.7% C. 17.4% D. 12.9% E. 14.8% F. 13.7% QUESTION 16 Games R' Us Inc. is expected to pay no dividends for the next six years. At the end of the sixth year it will pay a dividend of $45 and cease operations. How much would you pay for the stock if you require a 10% rate of return? A. $22.58 B. $14.11 C. $19.76 D. $28.22 E. $16.93 F. $25.40