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

question 88

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 market capitalization rate for Risk Metrics?

• A)13.6%
• B)13.9%
• C)15.6%
• D)16.9%
• E)none of the above

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