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Cartwright Brothers stock is currently selling for $40 a share. The stock is expected to pay a $4 dividend at the end of the year.

Cartwright Brothers’ stock is currently selling for $40 a share. The stock is expected to pay a $4 dividend at the end of the year. The stock’s dividend is expected to grow at a constant rate of 7 percent a year forever. The risk-free rate (kRF) is 7 percent and the market risk premium (kM – kRF) is 5 percent. What is the stock’s beta?

 

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