Question: common stocks par value $0.50 dividend expected 1 year from now $1.60 dividend growth rate 8% stocks beta 1.25 T-bill rate 7% real risk-free rate

common stocks par value $0.50

dividend expected 1 year from now $1.60

dividend growth rate 8%

stocks beta 1.25

T-bill rate 7%

real risk-free rate 2%

expected return on

the market 12%

1. Use CAPM to determine the required rate of return for the stock.

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