A company with a beta of 2.2 pays dividends of $3.50 per share. Other companies in the market earn a return of 7%, while risk-free government bonds pay 2% annually. If the company's stock price is $12 per share, what rate of return would an investor expect?

Answer rating: 100% (QA)

We can estimate the expected return on the stock using the Capital Asset Pricing Model CAPM CAPM For... View the full answer