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I need help with 12 and 13: 11 A company's stock has a beta of 1.63....

I need help with 12 and 13:

  • 11 A company's stock has a beta of 1.63. The risk free rate is 3.6%, and the expected rate on stocks is 10%. What is the required return on this stock using CAPM.

a 8.35%

b 10.25%

c 12.05%

d 14.03% 


  • 12 Using the required rate of return calculated in question 11. If a share of this common stock has just paid a dividend of $2.40, and the expected long-run growth rate is 7 percent, value this stock. 


a. 36.52

b. 46.85

c. 50.87

d. 59.37 


  • 13 Using the required rate of return calculated in question 11. If a share of this common stock has just paid a dividend of $2.40, with no expected dividend growth, value this stock.
    • a. 19.92
    • b. 21.00
    • c. 24.36
    • d. 17.11 

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