Exhibit 87
Use the Information Below for the Following Problem(S)
You

question 73

Multiple Choice

Exhibit 8.7
Use the Information Below for the Following Problem(S)
You expect the risk-free rate (RFR) to be 4 percent and the market return to be 10 percent. You also have the following information about three stocks.
$\begin{array}{ccccc}\text { Stock } & \text { Beta } & \begin{array}{c}\text { Current } \\\text { Price }\end{array} & \begin{array}{c}\text { Expected } \\\text { Price }\end{array} & \begin{array}{c}\text { Expected } \\\text { Dividend }\end{array} \\\hline \mathrm{A} & 1.5 & \$ 10 & \$ 11.50 & \$ 1.00 \\\mathrm{~B} & 1.1 & \$ 27 & \$ 30 & \$ 0.00 \\\mathrm{C} & 0.8 & \$ 35 & \$ 36 & \$ 1.50\end{array}$

-Refer to Exhibit 8.7.What are the required rates of return for the three stocks (in the order A,B,C) ?

• A) 13.0%, 10.6%, 8.8%
• B) 15.0%, 11.1%, 2.9%
• C) 18.7%, 11.1%, 8.8%
• D) 21.7%, 10.0%, 6.9%
• E) 25.0%, 11.1%, 7.1%

---

Definitions:

Operational Job

A role focused on executing the day-to-day activities necessary for an organization's functioning, often involving tasks that support core business operations.

University Coursework

The combination of written assignments, projects, and exams that are part of a college or university program.

Integrated Approach

A comprehensive strategy that combines various methods, perspectives, or systems to address a problem or achieve a goal fully.

Succession Planning

The process of identifying and developing new leaders who can replace old leaders when they leave, retire or die, ensuring the organization's continuous success and leadership transition.