Multiple Choice
ABC Co.has a beta of 1.30 and an expected dividend growth rate of 5.00% per year.The T-bill rate is 3.00%,and the T-bond rate is 6.00%.The annual return on the stock market during the past three years was 15.00%.Investors expect the annual future stock market return to be 12.00%.Using the SML,what is ABC's required return?
A) 12.8%
B) 13.1%
C) 13.5%
D) 13.8%
Correct Answer:
Verified
Correct Answer:
Verified
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