Suppose you expect Zero Seven to pay dividends of $0.65 per share in the coming year, each share selling for $52.3 at the end of the year. If investments with risk equivalent to that of Zero Seven's stock have an expected return of 7.20%. a) What is the most you would pay for the stock today? b) What dividend yield would you expect for that price? c) What rate of capital gain would you expect for that price? d) The stock beta for Zero Seven stock is 1.35, is it therefore an offensive or defensive stock?

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To calculate the answers to the questions a To find the most you would pay for the stock today you c... View the full answer