As an analyst in Fidelity International, you are required to use a two-stage dividend discount model (DDM) and the CAPM to value stocks. Using the CAPM and DDM, you have valued company A at $63 per share, and you have to value Company B.

(1): Calculate the required rate of return for company B by using the information in the following table:

Beta Market Price Intrinsic Value Risk-free Rate Expected Market Return Company Company A B 1.4 1.2 $50 $23 $62 ? 6% 16%