Multiple Choice
Bertin Bicycles has a beta of 0.88 and an expected dividend growth rate of 4.00% per year.The T-bill rate is 4.00%,and the T-bond rate is 5.25%.The annual return on the stock market during the past 4 years was 10.25%.Investors expect the average annual future return on the market to be 11.50%.Using the SML,what is Bertin's required rate of return?
A) 10.48%
B) 10.75%
C) 11.02%
D) 11.29%
Correct Answer:
Verified
Correct Answer:
Verified
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