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PROBLEM # 6 ( 1 0 Total Points ) Frisco Fitness Clubs, a firm in the mature stage of its life cycle, has an expected

PROBLEM #6
(10 Total Points)
Frisco Fitness Clubs, a firm in the mature stage of its life cycle, has an expected year-end dividend, D1, of $4.80, a market price today, Po, of $40.00, and a constant growth rate, g, of 5.0 percent. The expected return on an average stock in the market, rM, is 12.9 percent, and Frisco Fitness' beta is What is the firm's expected return and risk-free rate, rRF?
6A. What is the stock's expected rate of return today?
P1=4.8
P0=40.8
9=5.0
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