Assume the risk-free rate is 2 and the expected rate of


Assume the risk-free rate is 2% and the expected rate of return on the market is 12%. A share of stock is now selling for $100. It will pay a dividend of $9 per share at the end of the year. Its beta is 1.2. What do investors expect the stock to sell for at the end of the year?

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Finance Basics: Assume the risk-free rate is 2 and the expected rate of
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