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Given the Following Information, Calculate the Expected Capital Gains Yield

Question 11

Multiple Choice

Given the following information, calculate the expected capital gains yield for Chicago Bears Inc.: beta = 0.6; rM = 15%; rRF = 8%; D1 = $2.00; P0 = $25.00. Assume the stock is in equilibrium and exhibits constant growth.


A) 3.8%
B) 0%
C) 8.0%
D) 4.2%
E) 2.5%

Correct Answer:

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