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Frontyard Inc has a beta of 0.9. The risk-free rate is 2.5% and the market risk premium is equal to 7%. The company is expected
Frontyard Inc has a beta of 0.9. The risk-free rate is 2.5% and the market risk premium is equal to 7%. The company is expected to pay a dividend of $2 per share. The current stock price is equal to $40. Dividends are expected to grow at a constant rate, g. a. Calculate the required rate of return rs using the CAPM model. The required rate of returnr, is equal to %. b. Calculate the growth rate of dividends g g = c. Calculate D. Do= $ d. Calculate P5 Da= $ P5 = $ Give your reasons
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