This expectation to be consistent with the capm

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Reference no: EM132028972

You are thinking of buying a stock priced at $98 per share. Assume that the risk-free rate is about 4.5% and the market risk premium is 5.6%. If you think the stock will rise to $124 per share by the end of the year, at which time it will pay a $1.24 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?

Reference no: EM132028972

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