Multiple Choice
Todd Mountain development Corporation is expected to pay a dividend of $2.50 in the upcoming year.Dividends are expected to grow at the rate of 8% per year.The risk-free rate of return is 5% and the expected return on the market portfolio is 12%.The stock of Todd Mountain Development Corporation has a beta of 0.75.Using the CAPM,the return you should require on the stock is _________.
A) 7.25%
B) 10.25%
C) 14.75%
D) 21.00%
Correct Answer:
Verified
Correct Answer:
Verified
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