FORMULAS Price (P/E) x EPS: Vo= D/k: VoD/(kg): k=E()=P(E(M)- E(n)=+B[E(M)-n]: P/E (1/earnings yield). Vo [E(D) E(P)(1+k) Bp-EWB: S[E(n)-ra): Sp [E(fp)-top: PAB=(Cov (ra. Fe(OA.dll CoV (AB) PABOA OB: Capital Gain yield = [(Ps-PayPal: Dividend yield Div/Ps HPR=[(Ps-Pa) + Divy/Pa: HPR = Capital Gain Yield + Dividend Yield Arithmetic Average Sum of returns in each period divided by number of periods: Geometric Return = [(1+r) x (1+) X (1+r)]-1: E(rp) -ZWE(n): R=r+E() *** Consider the CAPM. The risk-free rate is 4%, and the expected return on the market is 14%. What is the expected return on a stock with a beta of 1.4? 19.6% O 21.6% 18% O 14%