The risk-free rate of return (r) is 2% and the expected market rate of return (rm) is 10%. The shares A, B and C all pay a dividend (D) of $6 a year. The betas for the shares are: A = 0.2; f = 1.0; and ?c = 1.8. The shares are all trading at the same price (P) of $60. Requirements. Answer the following questions: Q1. What are the expected returns on A, B and C?

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