QUESTION 1 Stock A has a systematic risk of Beta 1.5. The risk-free rate is 2% and the return on the market portfolio is 12% The last dividend paid was $2.25. The growth rate of dividends in the first period is 3% and from the second period on is 2%. The required rate of return for A is, a. 2% b. 12% C. 3% d. 17% e. 1.5%