Gareth owns 1 share of stock A and 1 share of stock B.  In 1 year from today, the total value of his holdings is expected to be 119.42 dollars.  Stock A is currently priced at 47.13 dollars, has an expected return of 12.58 percent, and is expected to pay a dividend of 6.54 dollars in 1 year from today.  Stock B is currently priced at 74.88 dollars and is expected to pay a dividend of 5.93 dollars in 1 year from today.  What is the expected return for stock B?  Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Gareth owns 1 share of stock A and 1 share of stock B.  In 1 year from today, the total value of his holdings is expected to be 119.42 dollars.  Stock A is currently priced at 47.13 dollars, has an expected return of 12.58 percent, and is expected to pay a dividend of 6.54 dollars in 1 year from today.  Stock B is currently priced at 74.88 dollars and is expected to pay a dividend of 5.93 dollars in 1 year from today.  What is the expected return for stock B?  Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

 

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