QUESTION 43

1. A stock is selling for $50 in the market. The companys beta is 1.2, the market risk premium (r_M - r_F) is 5%, and the risk-free rate is 6%. The most recent dividend paid is D₀ = $2.0 and dividends are expected to grow at a constant rate g. Whats the required rate of return by common shareholders?

   		5.0%
   		6.0%
   		11.0%
   		12.0%

5 points

QUESTION 44

1. Based on the information from Question 43, whats the dividend growth rate g?

   		6.22%
   		7.31%
   		7.69%
   		8.15%

5 points

QUESTION 45

1. Based on the information from Question 43 and 44, calculate the stocks expected dividend yield.

   		4.31%
   		5.00%
   		6.22%
   		7.70%