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What market price gives the investor a return consistent

Question: The probability distribution for kM for the coming year is as follows:

Probability kM

0.05    7%
0.30    8
0.30    9
0.30 10
0.05   12

If kRF = 6.05% and Stock X has a beta of 2.0, an expected constant growth rate of 7 percent, and D0 = $2, what market price gives the investor a return consistent with the stock's risk?

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Finance Basics: What market price gives the investor a return consistent

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