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The risk-free rate is 4%, the market risk premium is 8%. LDC Company's stock has a beta of 1.5. The last dividend was $5, and

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The risk-free rate is 4%, the market risk premium is 8%. LDC Company's stock has a beta of 1.5. The last dividend was $5, and the dividend growth rate (g) is expected to be a constant of 10%. The stock's current market price (Po) is $75. If you buy the stock now, what is the expected rate of return for the first year? Assume that the stock price will reach the equilibrium level at t=1 if it is currently mispriced. Select one: ca. 43.87% b. 44.43% O c. 41.78% d. 42.95%

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