QUESTION 30

1. A stock's beta equals 1.4, the risk free rate of return is 1.5% and the market return is 7.2%. Calculate the return that should be required on the stock according to the CAPM equation.

   		9.08%
   		10.43%
   		7.98%
   		8.64%
   		none of these

4 points

QUESTION 31

1. A common stock will pay a $3.20 dividend, expected to grow at a constant rate of 2%. If the stock sells for $27, what is the return?

   		13.34%
   		12.21%
   		14.49%
   		13.85%
   		none of these