# Calculating a stocks beta

Explain how you would solve this problem. Specify the steps you would take and equation(s) you would use) Cartwright Brothers' stock is currently trading for $40 a share. The stock is expected to pay a $2 dividend at the end of the year. The stock's dividend is expected to grow at a constant rate of 7% a year forever. The risk-free rate is 6% and the market risk premium is 6%, also. What is the stock's beta?

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#### Solution Summary

The expert calculates a stock beta.

$2.19