In a recent research report for Seagate Technologies (STX), Standard and Poors ranked STX as a 4-star buy. Excerpts from the research report included:

Current STX stock price is $30.02

A one-year target price of $35.00

Expected quarterly dividends of $0.32 per share over the next year, $1.28 total

Stock beta of 2.20

The prevailing risk-free is 3.25%, and the applicable equity risk premium is 7.5%.

Using CAPM, what is the required return for STX?

The required return is 19.95%

1. What is the EXPECTED holding period. percentage return over the next year for STX?

2. Using the required return of 19.75% and the answer to question #1, what is S&P's estimate of the expected risk-adjusted performance for STX for the year?

Please explain the answer so I can learn. Thanks