Midwest Airline Is Expected to Pay a Dividend of $7

question 97

Multiple Choice

Midwest Airline is expected to pay a dividend of $7 in the coming year.Dividends are expected to grow at the rate of 15% per year.The risk-free rate of return is 6% and the expected return on the market portfolio is 14%.The stock of Midwest Airline has a beta of 3.00.The return you should require on the stock is ________.

• A)10%
• B)18%
• C)30%
• D)42%
• E)none of the above

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Definitions:

Core Competencies

Particular strengths or advantages that a company possesses, allowing it to perform better than its competitors in certain areas.

Environmental Opportunities

External factors in the business environment that an organization can exploit to its advantage, including technological advancements, regulatory changes, and market trends.

Internal Demands

The requirements or needs within an organization that can influence its operations, such as workforce capabilities, technology needs, and financial resources.

Coordinated Means

A strategy or approach involving the organized and integrated efforts of multiple entities or processes to achieve a specific goal.