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Suppose the risk-free rate is 8% and the market risk premium is 10%. (a) Find the beta of a stock with an expected return of
Suppose the risk-free rate is 8% and the market risk premium is 10%. (a) Find the beta of a stock with an expected return of 6% and an alpha of 2%. (b) A security that will pay a dividend of $9 at year-end is selling for $100 and has a beta of 1.0. What do investors expect the stock to sell for at the end of the year?
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