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Use the following data for questions 1 through 4. Stock A has a systematic risk of . The risk-free rate is and the return on
Use the following data for questions 1 through 4. Stock A has a systematic risk of . The risk-free rate is and the return on the A = 1. 5 r F = 2% market portfolio is r . The last dividend paid was . The growth rate of M = 12% D 0 = $2. 25 dividends in the first period is g , and from the second period on is . 1 = 3% g 2+ = 2% 1. The required rate of return for A is a. 2% b. 12% c. 3% d. 17% e. 1.5% 2. The price at time 1, P is 1 a. $16.55 b. $15.45 c. $15.76
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