Consider a stock of which beta is 1.5. The risk-free rate is 2%, and the market risk premium is 6%. According to the CAPM, what is the expected return on the stock?

Group of answer choices

7%

8%

9%

11%

The stock is expected to pay a dividend of $0.8 per share in year 1. Since then, dividends are expected to grow at 6% every year forever. What is the stock price?

Group of answer choices

$16.0 per share

$26.7 per share

$40.0 per share

$80.0 per share