Question

Dee's Fashions has a growth rate of 3.2 percent and is equally as risky as the market while its stock is currently selling for $32 a share. The overall stock market has a return of 10.9 percent and a risk premium of 6.8 percent. What is the expected rate of return on this stock?

A) 10.0 percent

B) 9.2 percent

C) 10.9 percent

D) 11.3 percent

E) 11.7 percent

Answer

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