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The Jackson Company has just paid a dividend of $3.00 per share on its common stock, and it expects this dividend to grow by 10
The Jackson Company has just paid a dividend of $3.00 per share on its common stock, and it expects this dividend to grow by 10 percent per year, indefinitely. The firm has a beta of 1.50; the risk-free rate is 10 percent; and the expected return on the market is 14 percent. Which of the following is the required rate of return as per the capital asset pricing model (CAPM) approach?
A | 9 percent |
B | 12 percent |
C | 7 percent |
D | 16 percent |
E | 18 percent |
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