IncorrectQuestion 14

0 / 1 pts

Given the following information:

Debt: 10000 bonds outstanding, maturity in 7 years, periodic (six-month) yield s 4%, annual coupon rate is 5%.

CS: One million shares outstanding, current market value is $20.00 per share, last annual dividend was $2.00 and the next dividend is expected to be $2.10 based upon the constant dividend growth model, the market risk premium is 7.0% and the risk-free rate is 3.5%.

Based upon the answer you obtained in the question above, what must beta be for the common stock?

greater than 1.9

between 1.8 nad 1.9

between 1.7 and 1.8