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QUESTION
Jack buys Wealth Enterprises for $40. He expects the firm's earnings and dividends to grow at an annual rate of 7%.The firm expects to pay a dividend...
Jack buys Wealth Enterprises for $40. He expects the firm's earnings and dividends to grow at an annual rate of 7%.The firm expects to pay a dividend of $2.00 next year. The market risk premium is 8%. Jack's expected rate of return is
a. 10%
b. 12%
c. 12.35%
d. 15%
