A firm has a current price of $40 per share, an expected growth rate of 11% and expected dividend per share (D1) of $2. Given its risk you have a required rate of return for it of 12%. Your expected rate of return and investment decision is as follows:
A) 10% - do not buy
B) 12% - do not buy
C) 14% - buy
D) 16% - buy
E) 18% - buy
Correct Answer:
Verified
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