You are considering buying shares in Chattanooga Railways. The stock is currently trading for S60.46. Analysts expect the next annual dividend to be $1.63. (The next dividend will be paid in one year) Dividends are expected to grow in perpetuity at the annual rate of 2.00%. Chattanooga's beta is 0.43. The risk free rate is 36 % and the expected retum on the market is 10.80%. Use this information to answer the questions that follow. a. What annual return will you earn on Chattanooga if you buy it today, hold it and receive the perpetual stream of growing dividends? b. Under the CAPM, what is the equilibrium rate of return on Chattanooga's shares given its systematic risk? c. Does Chattanooga's stock plot above the SML, below the SML or on the SML? d. Is Chattanooga's stock a good investment? 96. a. What annual return will you earn on Chattanooga if you buy it today, hold it and receive the perpetual stream of growing dividends? The annual return will be (Round to two decimal places.)