Fools Gold Mining Company Is Expected to Pay a Dividend

Fools Gold Mining Company is expected to pay a dividend of $8 in the upcoming year.Dividends are expected to decline at the rate of 2% per year.The risk-free rate of return is 6% and the expected return on the market portfolio is 14%.The stock of Fools Gold Mining Company has a beta of -0.25.The return you should require on the stock is ________.

A) 2%
B) 4%
C) 6%
D) 8%
E) none of the above

Correct Answer:

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