An analyst gathered the following information for a stock and market parameters: • stock beta = 1.22; • expected return on the Market = 8.17%; • expected return on T-bills = 2.08%; • current stock Price = $6.2; • expected stock price in one year = $14.64; expected dividend payment next year = $3.14. Calculate the required return for this stock. Please share your answer as a percentage rounded to 2 decimal places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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An analyst gathered the following information
for a stock and market parameters:
• stock beta = 1.22;
•
expected return on the Market = 8.17%;
expected return on T-bills = 2.08%;
• current stock Price = $6.2;
.
.
.
.
expected stock price in one year = $14.64;
expected dividend payment next year =
$3.14.
Calculate the required return for this stock.
Please share your answer as a percentage
rounded to 2 decimal places.
Transcribed Image Text:An analyst gathered the following information for a stock and market parameters: • stock beta = 1.22; • expected return on the Market = 8.17%; expected return on T-bills = 2.08%; • current stock Price = $6.2; . . . . expected stock price in one year = $14.64; expected dividend payment next year = $3.14. Calculate the required return for this stock. Please share your answer as a percentage rounded to 2 decimal places.
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