Risk Metrics Company Is Expected to Pay a Dividend of $3.50

question 52

Multiple Choice

Risk Metrics Company is expected to pay a dividend of $3.50 in the coming year. Dividends are expected to grow at a rate of 10% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock is trading in the market today at a price of $90.00. What is the approximate beta of Risk Metrics's stock?

• A) 0.8
• B) 1.0
• C) 1.1
• D) 1.4
• E) None of the options are correct.

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Definitions:

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