Calculate decimals to four places.

18. Carbonation Inc. just paid a dividend of $2.00. Its stock is now selling for $48 per

share. The firm is 50% as risky as the market. The expected return on the market is 14 percent,

and the yield on U.S. Treasury bonds is 11 percent. If the market is in equilibrium, what rate of growth is

expected?

a. 13%

b. 10%

c. 4%

d. 8%

e. -2%