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Question
A firm has a current book value per share of $21.10 and a market price per share of $37.57. Next year's earnings are expected to be $5.60 per share and the expected earnings growth rate is 2.5 percent. What is the required rate of return on this stock?A. 14 percent
B. 15 percent
C. 16 percent
D. 17 percent
E. 18 percent
Answer
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