What is the required rate of return

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Problem: Lotus's Inc.'s most recent dividend was $2.50 per share (D0=$2.50). The dividend is expected to grow at a rate of 6% per year. The risk-free rate is 5% and the return on the market is 9%. The company's beta is 1.5.

Required:

Question 1: What is the required rate of return (using CAPM model) (sample format: 13.55% or 0.1355)

Question 2: What is the dividend next year (D1)? (sample format: $1.50 or 1.50)

Question 3: What is the price of the stock today (P0)? (sample format: $35.50 or 35.00)

Reference no: EM132432689

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