1. A stock has a beta of 1.45, the expected return on the market is 11 percent, and the risk-free rate is 3.85 percent. What must the expected return on this stock be?
A) 19.8%
B) 13.51%
C) 14.22%
D) 14.79%
E) 14.93%
2. What is meant by "double taxation of dividends"?
According to the Gordon growth model, an increase in the required return on equity...
a. increases the future value of the stock.
b. reduces the current dividend.
c. reduces the expected growth rate of the dividend.
d. reduces the value of a stock.