Question: The probability distribution for rm for the coming year is as follows: Probability 0.05 0.30 0.30 0.30 0.05 7% 8 9 10 12 If IRF

 The probability distribution for rm for the coming year is as

The probability distribution for rm for the coming year is as follows: Probability 0.05 0.30 0.30 0.30 0.05 7% 8 9 10 12 If IRF = 6.05% and Stock X has a beta of 2.0, an expected constant growth rate of 7 percent, and D1 = $2, what market price gives the investor a return consistent with the stock's risk? $37.50 $42.38 $36.90 $39.62

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