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Consider the following stocks, all of which will pay a liquidating dividend in a year and nothing in the interim . Market Capitalization ($ million)

Consider the following stocks, all of which will pay a liquidating dividend in a year and nothing in the interim.

Market Capitalization

($ million)

Expected Liquidating Dividend

($ million)

Beta

Stock A

908

1,000

0.74

Stock B

840

1,000

1.54

Stock C

841

1,000

1.37

Stock D

879

1,000

0.76

Calculate the expected return for each stock. The expected return of Stock A is __________%. (Round to two decimal places.) The expected return of Stock B is __________%. (Round to two decimal places.) The expected return of Stock C is __________%. (Round to two decimal places.) The expected return of Stock D is __________%. (Round to two decimal places.)

The correlation between the expected return and market capitalization of the stocks is __________. (Round to five decimal places.)

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