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need help with questions 1-3 Stock A has a systematic risk of A=0.75. The risk-free rate is RF=2% and the return on the market portfolio
need help with questions 1-3
Stock A has a systematic risk of A=0.75. The risk-free rate is RF=2% and the return on the market portfolio is RM=12%. The last dividend paid was D0=$2.00. The growth rate of dividends in the first period is g1=5%, and from the second period on is g2+=0%. 1. The required rate of return for A is a. 2% b. 12% c. 9.5% d. 9% e. 14% 2. The price at time 1,P1 is a. $22.11 b. $21.05 c. $16.67 d. $21.00 e. $23.33 3. The price at time 1,P0, is a. $22.11 b. $21.05 c. $16.67 d. $21.00 e. $23.33 Step by Step Solution
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