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An analyst gathered the following information for a stock and market parameters: stock beta+ 1.427; expected return on the market = 9.73%; expected return on
An analyst gathered the following information for a stock and market parameters: stock beta+ 1.427; expected return on the market = 9.73%; expected return on T-bills+ 1.01%; current stock price= $5.57; expected stock price in one year = $12.88; expected dividend payment next year= $1.36. Calculate the required return and expected return for this stock:
a) Required return
b) Expected return
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