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1. ِRami  requires a return of 12 percent. A stock sells for $18, it pays a dividend...

1. ِRami  requires a return of 12 percent. A stock sells for $18, it pays a dividend of $1, and the dividends compound annually at 6 percent. What should the price of the stock be?

2. You are considering a stock A that pays a dividend of $1. The beta coefficient of A is 1.3. The risk free return is 6%, while the market average return is 13%. a. What is the required return for Stock A? b. If A is selling for $10 a share, is it a good buy if you expect earnings and dividends to grow at 6%?

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