Sure Tool Company Is Expected to Pay a Dividend of $2

question 53

Multiple Choice

Sure Tool Company is expected to pay a dividend of $2 in the upcoming year.The risk-free rate of return is 4% and the expected return on the market portfolio is 14%.Analysts expect the price of Sure Tool Company shares to be $22 a year from now.The beta of Sure Tool Company's stock is 1.25. The market's required rate of return on Sure's stock is

• A)14.0%.
• B)17.5%.
• C)16.5%.
• D)15.25%.
• E)None of the options

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Definitions:

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