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Question 12 (1 point) ABC Co. has a beta of 1.30 and an expected dividend growth rate of 5.00% per year. The T-bill rate is
Question 12 (1 point)
ABC Co. has a beta of 1.30 and an expected dividend growth rate of 5.00% per year. The T-bill rate is 3.00%, and the T-bond rate is 6.00%. The annual return on the stock market during the past three years was 15.00%. Investors expect the annual future stock market return to be 12.00%. Using the SML, what is ABCs required return?
Question 12 options:
12.8% | |
13.8% | |
13.1% | |
13.5% |
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