QUESTION 4 15 The market price of a security is $ 28.00 16 Its expected rate of return (Eri) is 16.00% 17 The risk free rate of return (rf) is 6.00% 18 The Current Market Risk Premium (Erm -rf) is 8.00% 19 The stock is expected to pay a CONSTANT dividend into perpetuity. 20 The correlation coefficient wrt market portfolio doubles. 2 21 Note: When the CORR doubles, the beta, and risk premium will also double. 22 There are 4 questions related to this data. 23 All percentages and dollar amounts should be taken out to 2 places. What is the relevant Annual Dividend? (use DDM to solve for relevant annual Dividend) a. Relevant Annual Dividend = $4.48 b. Relevant Annual Dividend = $3.48 c. Relevant Annual Dividend = $2.48 d. Relevant Annual Dividend = $8.48