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A stock has an expected return of 12 percent, its beta is 1.35, and the expected return on the market is 10 percent. What must the risk-free rate be? (Do not round your intermediate calculations.)
A) 4.50%
B) 4.29%
C)4.07%
D)4.46%
E)-1.50%
Using the constant growth formula and the data above, what price would you estimate for Wal-Mart according to that model if the dividend was expected to grow by a constant 3%?
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