Given the Following Information, Calculate the Expected Capital Gains Yield

question 49

Multiple Choice

Given the following information, calculate the expected capital gains yield for Chicago Bears Inc.: beta = 0.6; rM = 15%; rRF = 8%; = $2.00; P0 = $25.00.Assume the stock is in equilibrium and exhibits constant growth.

• A)3.8%
• B)0%
• C)8.0%
• D)4.2%
• E)None of the above.

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