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Suppose that Monrose Inc stock is expected to pay a dividend of $2.60 per year. If...

Suppose that Monrose Inc stock is expected to pay a dividend of $2.60 per year. If Monrose's stock has a beta 1.8 and the current stock price is $65, what is the expected return for this stock?

6.77%

7.20%

2.77%

None of these

4.00%

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Answer #1

expected return=Annual dividend/Current value

=2.60/65

which is equal to

=4.00%

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