What Return on Equity Do Investors Seem to Expect for a Firm

question 1

Multiple Choice

What return on equity do investors seem to expect for a firm with a $55 share price, an expected dividend of $4.60, a beta of 0.9, and a constant growth rate of 3.5%?

• A) 9.87%
• B) 12.48%
• C) 13.95%
• D)11.86%

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