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Please explain how to solve the following: A stock has a Beta of 1.25. What is the required rate of return for the stock if
Please explain how to solve the following:
A stock has a Beta of 1.25. What is the required rate of return for the stock if the market risk premium is 8% and risk free rate is 2%? Given that the stock is trading at $115 today, what would you expect the stock price to be one year from (ignore dividends)?
a.12% , $128.8
b.10% , $126.5
c.12%, $115
d.Insufficient information
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