The Sure Tool Company is expected to pay a dividend of $2 in…
The Sure Tool Company is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. Analysts expect the price of Sure Tool shares to be $22 a year from now. The beta of Sure Tool’s stock is 1.25. What is the required rate of return on Sure Tool’s stock?