Question
Thames Inc.'s most recent dividend was $2 per share (D0 = $2). The dividend is expected to grow at a rate of 6% per year.
Thames Inc.'s most recent dividend was $2 per share (D0 = $2). The dividend is expected to grow at a rate of 6% per year. The risk-free rate is 4% and the return on the market is 12%. The company's beta is 1.5 (beta = 1.5). What is the required rate of return on the stock (ks)? What is the price of the stock today (P0)? a The required rate of return on the stock (ks) is 18% and the price of the stock today (P0) is $17.67 b The required rate of return on the stock (ks) is 16% and the price of the stock today (P0) is $21.2 c The required rate of return on the stock (ks) is 16% and the price of the stock today (P0) is $20 d The required rate of return on the stock (ks) is 18% and the price of the stock today (P0) is $16.67
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