Multiple Choice
The Wrench Company is expected to pay a dividend of $1.00 in the upcoming year. Dividends are expected to grow at the rate of 6% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock of the Wrench Company has a beta of 1.2. What is the return you should require on The Wrench's stock?
A) 12.0%
B) 14.6%
C) 15.6%
D) 20%
E) None of the options are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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