ABC Corp. has outstanding stock that is presently valued at $45 per share. The last dividend paid was $2.25. Company dividends are expected to increase at a rate of 3% per year. United States treasuries are currently offering 2.50% yields. The market as a whole if currently earning 8%. Smith's beta is 1.15. Smith's tax rate is 30%. What returns are equity investors expecting from Smith using the Capital Asset Pricing Model ("CAPM")

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