You expect the price of ABC stock to be $27 per share a year from now. Its
Fantastic news! We've Found the answer you've been seeking!
Question:
You expect the price of ABC stock to be $27 per share a year from now. Its current market price is $25, and you expect it to pay a dividend one year from now of $0.5 per share. Its CAPM beta is 0.9, the risk-free rate is 2%, and the market risk premium is 8%.
What is the required rate of return on ABC?
7.2%
7.4%
9.2%
10.9%
Expert Answer:
Posted Date:
