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    Calculating the expected return on equity

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    What return on equity do investors expect for a firm with a $17 stock price, a dividend in year one of $2.00, a beta of 1.6, and a constant growth rate of 2%?

    1. 13.76%
    2. 26.00%
    3. 11.75%
    4. 16.33%
    5. 17.21%

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    https://brainmass.com/business/flow-to-equity/calculating-the-expected-return-on-equity-446089

    Solution Summary

    Solution determines the expected return on equity in the given case.

    $2.19