If the Risk-Free Rate Is 7%, the Return on the Market

Multiple Choice

If the risk-free rate is 7%, the return on the market portfolio is 15%, and the beta is 1.5, what is the value of the stock if the current dividend (D₀) is $1.20 and it is expected to grow at a constant rate of 6% per year?

A) $6.30
B) $6.70
C) $9.20
D) $9.80
E) $20.00