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The risk-free rate rrf is 6 percent and the market risk

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Cartwright Brothers'stock is currently selling for $40 a share. The stock is expected to pay a $2 dividend at the end of the year. The stock's dividend is expected to grow at a constant rate of 7 percent a year forever. The risk-free rate (rRF) is 6 percent and the market risk premium (rM - rRF) is also 6 percent. What is the stock's beta?

a. 1.06
b. 1.00
c. 2.00
d. 0.83
e. 1.08

Reference no: EM13566682

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