The expected return less the required return

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Firm H's shares sell today for $62 and are forecast to be priced at $77.50 and to pay a dividend of $1.80 at the end of one year. Firm H's beta is 0.80, the market risk premium is 5.5%, and the riskless return is 2%. The expected return less the required return is

21.50%

27.95%

20.21%

24.51%

Reference no: EM13908803

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