~~~In Excel~~

Question 2: The rate of return on risk-free asset is 5% while the expected rate of return required by a firm with a beta of 1.5 is 20%.

What is the market risk premium? (6 points)

What would be the expected rate of return on a stock with a beta of 0.8? (6 points)

What should be the price of the stock for the company in part b if it paid $1.5 in dividends today and the dividend growth rate is 5%? (8 points)

~~~In Excel~~